DFL marijuana bill a Minnesotan twist on legalization

This week DFL lawmakers rolled out the 243-page marijuana legalization bill they hope to pass in the current legislative term. 

The measure shares many similarities with legalization frameworks already in place in the 21 other states that have allowed recreational marijuana use since the first measures passed in Colorado and Washington more than a decade ago. 

Minnesota’s bill would allow adults age 21 and over to purchase and possess up to two ounces of cannabis flower or edible products from a licensed retailer and grow up to 8 plants at their own home. It would also establish a statewide Office of Cannabis Management to oversee the new industry, with authority to grant licenses, tax sales, test product purity and set limits on labeling, advertising and potency. 

The bill would create a process for expunging certain previous cannabis convictions, amend labor laws around workplace cannabis testing, and update laws regarding criminal penalties for unauthorized sale and possession.

But the bill also contains a number of provisions that are unique to Minnesota, some of which could prove to be contentious as the legislation makes its way through the Capitol. Here are a few of the notable ones.

Near beer, but for weed 

The only state in the nation still selling 3.2% beer would create the country’s first separate licensing system for what the bill calls “lower potency edible products.” Those are essentially the same low-THC edibles somewhat haphazardly approved by the Legislature last summer. Those low-dose licenses would be available to operators of bars and restaurants, allowing them to sell cannabis products alongside Budweiser and Jim Beam.

No other state allows on-site cannabis sales at food and liquor establishments, in part due to concerns over patrons under the influence of two intoxicating substances at once. But because the Legislature included virtually no regulations when authorizing low-dose edibles last summer, in many communities bars and restaurants were among the first businesses to start offering those products. The low potency licensing provision is a nod to how tough it would be to put that genie back in the bottle.

Lower taxes

The early arguments for state-legal weed were marked by enthusiastic promises about the things governments could accomplish with all that extra tax revenue. Those predictions turned out to be overly rosy: State budgets are so massive that cannabis taxes, even the steepest ones, often add up to just a fraction of a percent. And when regulators set taxes too high, they risk creating space for a black market to continue to thrive simply by offering cheaper product.

The lawmakers introducing the bill at this week’s press conference emphasized, repeatedly, that it isn’t about generating revenue. They want the industry to be able to cover its own enforcement and regulatory costs and that’s about it. 

As a result, the proposed marijuana tax is lower than in most other states: just 8% on top of the regular state sales tax. Other states have levied taxes at rates of 15, 20 or even 30%, and still others have taken different approaches by taxing by weight or THC content rather than price.

No local opt-out

In states like California and Washington many municipalities have decided to implement bans on cannabis sales — the weed version of a dry county. That won’t be an option in Minnesota if the bill passes as-is. Local governments wouldn’t be able to prohibit the establishment of cannabis businesses, nor would they be able to impose their own taxes. 

They would, however, be able to put various restrictions on where, when and how those businesses operate.

Look for this provision to be a flashpoint, as the League of Minnesota Cities has been adamant about wanting municipalities to be able to opt out.

Government weed?

The bill does, however, explicitly allow cities to establish municipal, government-run marijuana shops, similar to what exists for alcohol. These aren’t common in other states but there have been some notable exceptions. 

Guardrails against ‘big marijuana’

The bill contains a number of provisions intended to make it easier for local independent operators to get into the marijuana businesses. Unlike many states, there’s no set limit on the number of licenses available, for instance, which makes it difficult for big players to step in and grab up a big chunk of the market. 

There are also limits on how many and what types of licenses individuals can obtain, making it difficult for any one person or entity to become the Cannabis King of Minnesota. Vertical integration — where one business controls everything from growing to wholesaling to retail sales — is explicitly prohibited.

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It’s worth noting that all these provisions are subject to change when debate over the bill starts in earnest, and it’s still not entirely clear the DFL has the votes necessary to pass it in both chambers. Still, the legislation contains a mix of time-tested and novel approaches to cannabis regulation, with the low potency edible provisions representing a distinctly upper Midwestern spin on the issue.