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Cannabis businesses hopeful for license lottery
The recreational cannabis industry in Minnesota is taking a step forward during the next few weeks, as hopeful business owners hope to win licenses through a social equity lottery that will offer 282 licenses – to more than 3,100 applicants.
ST. PAUL, Minn. (FOX 9) - The Office of Cannabis Management (OCM), tasked with overseeing Minnesota’s legal recreational marijuana industry, has unveiled its first draft of regulatory proposals that will govern how businesses operate within the state.
The 111-page document is the OCM’s first proposal, and will be used to seek public input on how the industry should run as businesses receive licenses to operate adult-use cannabis, medical cannabis and lower-potency hemp edible businesses within the state.
According to the OCM, the rules "reflect a desire to construct a regulatory environment that focuses on outcomes, and affords the autonomy to choose the best path to compliance."
The rules are designed to apply to all license tiers, and hope to minimize regulation duplication, OCM says.
A public feedback window is open now until Aug. 30, and people can submit their input here.
License disqualification
The document outlines a wide range of criminal offenses that would disqualify a potential license holder from being granted one to operate any cannabis or hemp-related business.
In addition to crimes in Minnesota, it instructs the office to disqualify a license holder or applicant who was convicted in another state or federal court.
In general, a disqualification would expire five years from the date of conviction, but it also outlines the basis for a ban being permanent.
However, some license holders with past criminal offenses have the ability to apply for a "social equity license" and be part of the lottery to be granted one later this fall.
Both appeal and petition procedures are also outlined in the document.
Samples
All samples of products, except lower-potency hemp edibles, provided by a cannabis company must be recorded in a statewide monitoring system, and no samples will be allowed to be given to anyone under 21 years old.
According to OCM, samples are to be provided solely for "quality control and educational purposes."
Potency
In a deviation from other state-regulated markets, OCM will also restrict how potent a product could be.
Unless otherwise stated in law, no product can exceed the following potency limitations:
- Cannabis concentrates marketed for sale in the adult-use market can not exceed 70% THC potency.
- Topical and transdermal cannabis and hemp products can not contain more than 1500 mg of THC.
Labeling
Similar to other states, products containing THC will need to be labeled to inform the consumer of its presence, to denote the age regulation of 21-plus, and whether the product is intended for medicinal usage.
Each plant must also be labeled with a batch number for identification.
Storage
A license holder is required to develop a procedure for the storage of products in a controlled environment that ensures they will be free from contamination.
The area where products are stored must be locked, with access restricted only to authorized personnel.
A license holder would be required to store cannabis waste, including products that failed testing, securely and separately from sealed products for sale.
They’ll also need to comply with existing Minnesota environmental law when it comes to disposal.
Product recall
If any product is found to have a contaminant level exceeding the accepted criteria established, the OCM could hold the license holder to a recall notice.
If ordered by the OCM, the license holder would need to perform a "traceback" and "trace-forward" investigation to identify all affected businesses, markets and consumers – responding to all information requests made related to the recall within 24 hours.
A license holder may also initiate a product recall when it identifies that their product is mislabeled, defective or unsafe for consumption.
Delivery
A delivery driver will not be allowed to transport more than $5,000 worth of products on a single delivery route.
Cannabis events
A cannabis-related event will not be allowed to run longer than four days.
All cannabis events licensed to permit on-site consumption must have limited access to the consumption area, which includes commercial-grade fencing surrounding the entire perimeter.
Records
A license holder must maintain accurate and comprehensive financial records, and make them available for inspection for the current and previous fiscal three years, or for the length of time the business has been licensed.
Records must also be available for inspection for the previous 10 tax years, or the number of tax years the license holder has been licensed to conduct business.
Financial records include cash logs, sale records, purchase of inventory, invoices, receipts and more.
Training records and safety plans will also need to be made available upon OCM's request.
Security
A cannabis business will need to provide security on its premises, which includes an alarm system, video surveillance, locks and lighting. The document outlines further specified requirements for each category.
Retailers must also establish a specified area for conducting retail sales that is open to individuals who are 21 years or older.