StarTribune - Now that recreational cannabis is legal, here's how to start your own pot business (Oct 23, 2023)
Choose now which license you’ll need to obtain for your business.
There are 16 different licenses for a cannabis business, said Jen Randolph Reise, an attorney and head of business and cannabis law at North Star Law Group. That’s more than any other state in the U.S., said Tanner Berris, president of Minnesota Cannabis College, a Brooklyn Center nonprofit founded in 2020 to help prepare the state for the adult-use cannabis market in Minnesota.
“The license that you have will really determine what business you’re able to run,” Berris said.
License types include wholesale, transporting, medical processor and retailer. Annual application fees vary from $250 to $10,000, with the initial license usually costing at least the same total, if not double.
There are also ancillary business models to choose that do not require adult-use licenses. Those are any non-plant touching businesses, such as consulting, legal counsel and selling equipment used for growing plants, Reise said.
“So many entrepreneurs come to me with ideas about the business that they want to apply for licensing, or they want to create post licensing, and it’s super important that we make sure that it’s a set of activities that they are able to do under [the cannabis bill],” Reise said.
Those who need help understanding what activities fall under which license types should seek counseling or advisors, Reise and Berris said. Minnesota Cannabis College, for example, has free tutorials online.
On the application, you will need to explain in detail the business’ core team, who has equity and if any of the parties involved qualify as social-equity applicants. A social-equity applicant, for instance, is someone previously convicted for a cannabis-related crime. Anyone applying as a social-equity applicant earns a boost in the process, which makes it more likely the office OKs the business, Berris said.
“In every business, knowing who’s on your team is important,” Berris said. “But especially when going through that licensure process, it’s going to be critical and could make the difference between getting a license or not getting one.”
Rushing into the adult-use business could be overwhelming for some, so focusing on low potency, hemp-derived sales and related business could be a way to build brand awareness and market share, Berris said. The application fee and initial license fee to be a low-potency retailer is $250 for each, per location.
Types of cannabis business licenses:
License type; Application/Initial license fees
Retail; $2,500; $2,500
Delivery; $250; $500
Manufacturer; $10,000; $10,000
Wholesaler; $5,000; $5,000
Transporter; $250; $500
Testing facility; $5,000; $5,000
Event organizer; $750; $750
Mezzobusiness (cultivate up to 15,000 square feet indoor, 1 acre outdoor and up to three retail locations); $5,000; $5,000
Microbusiness (cultivate up to 5,000 square feet indoor, 0.5 acre outdoor and one retail location); $500; $0
Hemp manufacturer; $250; $1,000
Hemp retailer; $250 (per location); $250 (per location)
Medical cannabis cultivator; $250; $0
Medical cannabis processor; $250; $0
Medical retailer; $250; $0
Source: Minnesota Cannabis College
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