Minnesota Struggles to Contain Illegal Cannabis Market Amid Licensing Delays
As the state continues to delay licensing legal cannabis dispensaries, Minnesota is facing a growing problem with its illegal cannabis market. According to a recent report by the Minnesota Office of Cannabis Management (OCM), over 199 pounds of illicit cannabis flower were found at 134 sites across the state from January to October 2024, valued at over $607,000. The majority of these illegal cannabis products were voluntarily destroyed by businesses upon inspection.
Four business entities were fined $10,000 each in civil penalties for their involvement in the illegal cannabis market. The OCM report also highlighted several challenges in combating the illicit market, including the practice of businesses “gifting” cannabis with other purchases, online cannabis sales, and mobile cannabis delivery services.
Minnesota legalized recreational cannabis use in August 2023, but the state has struggled to get business licensing on track. A Ramsey County judge halted the state’s pre-approved licensing lottery last November after a group of applicants who were denied access sued the cannabis office. The state agency still lacks a permanent director, with interim head Charlene Briner leaving the role earlier this month and being replaced by Eric Taubel, who had served as general counsel at the cannabis department.
Recreational cannabis sales are not yet legal in Minnesota, leaving the illicit market to fill the gap. According to the OCM, 40 percent of Minnesotans consume cannabis daily or almost daily, with participants reporting an average of 24 grams of cannabis use within the past month. This suggests a robust market for cannabis-related businesses.
The OCM has opened the window for verification of social equity applicants, with a deadline of January 30. A revamped timeline now puts the general licensing lottery between May and June, tentatively. The agency is working to address the challenges posed by the illegal cannabis market and is expected to provide updates on its progress in the coming months.
