As the end of the state congressional session approaches next month, a pair of adult-use cannabis legalization bills continues to move through committee in Minnesota's House and Senate. Democrats currently hold a majority in both chambers, and party officials have confidence the pending legislation will be enacted this year. The Senate version of the bill passed the Rules and Administration Committee on April 4, with several recent amendments. Significantly, the Senate bill contemplates regulating cannabis separately from hemp, to not unduly burden the state's existing, federally-legal hemp industry. The bill similarly contains a separate licensing category for manufacturers of food and beverages containing low levels of THC, which Minnesota legalized last year.
The House's version of the bill was also recently amended to include a new licensing category for low-potency THC products, contemplating a green light for on-site consumption of these products at establishments holding liquor licenses. A new, contentious provision of the House bill is a lower sales tax on adult-use marijuana sales – this tax rate would be progressively lowered in subsequent years, from an initial 8% to 5.25% in 2025. While Minnesota's Governor, Tim Walz (D), has expressed support for adult-use legalization, his budget request released in January includes a proposal to tax cannabis sales at 15%, to raise revenue to fund substance use treatment programs and marijuana conviction expungements.
Under the current proposals, both the House and Senate bills would allow adults ages 21 and older to purchase, and possess in public, up to two ounces of cannabis and possess up to five pounds in their homes; establish a procedure for automatic expungement of prior marijuana convictions; allow counties and municipalities to own and operate dispensaries; and legalize cannabis delivery services. As with prior versions of the bills, the current proposals would not allow municipalities to institute prohibitions on marijuana businesses, but would allow for reasonable restrictions on the hours and locations in which businesses may operate.
Recent polling shows that a majority of Minnesota residents support legalization of adult-use cannabis, but the current proposals face pushback, including from hemp farmers and retailers and groups concerned about the social equity implications of the bills. The state's legislative session ends in May, so lawmakers are facing pressure to wind up negotiations to avoid delaying finalization of these bills until next year.
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