Will there be a licensing round for social equity applicants in July?

Here's what we know, folks: MN-OCM has recommended to the legislature that they be allowed to conduct an early licensing round for social equity applicants only, with both an application and a lottery component. That could happen as soon as July!

Couple of caveats, though:

-It is not certain. Needs approval by the Legislature (we'll know much more in about 6 weeks).

-OCM later said that they are not proposing that the successful licensees could OPEN earlier - just that they would get the license and could therefore fundraise and get set up in the meantime (e.g. invest in a location & equipment).

At the same time, it's a huge opportunity for social equity applicants. If you think you might qualify as a social equity applicant, please reach out. We can help you figure out whether you do and next steps towards a strong license application.

Who qualifies as a social equity applicant?

Broadly speaking, there are 4 ways under HF100. Note that it is not race-related. Instead:

1) You or a close family member were convicted of possession or sale of cannabis prior to May 1, 2023 [note: this could be in any state, or federal, as I read it];

2) You are a service-disabled veteran, current or former member of the national guard, or lost honorable status due to a cannabis-related offense [note: this does NOT say all veterans];

3) You have been a resident for 5+ years of an area that meets certain standards for poverty or disproportionate enforcement of drug laws; or

4) You qualify as an "emerging farmer," a loose definition that includes many categories of Minnesotans who are traditionally less likely to farm (but this may be tightened up in the legislative session).

That's a summary. Contact me to talk about your specific details.

What about LLC applicants?

An entity applicant (which is what I advise my clients to do, so they can raise money and isolate their personal liabilities from their business) will be a social equity applicant if a certain percentage of its equity owners qualify as social equity applicants. OCM has suggested 65%, vs. 100% in HF100.

Caregiver Proposal: State Rep. Jess Hanson (D) has introduced a bill that would allow registered caregivers to grow the home grow allotment of registered medical patients who assign it to them, as is allowed in Michigan. In addition, the proposed bill increases the home grow plant count for patients enrolled in Minnesota’s medical cannabis program to a maximum 16 plants at their residence without a license (versus 8 now). You can find the bill HERE.

Elsewhere in the world, Germany has voted to federally legalize cannabis. Germany is now the third European Union member to legalize cannabis for personal use. More information about Germany's legalization can be found HERE.

Cannabis Expungement Board

This week, Governor Walz has announced the appointment of James Rowader to Executive Director of the Cannabis Expungement Board. More information can be found HERE.

Last week, Governor Walz appointed Amanda Brodhag as Public Defender Member and Rebecca St. George as Public Member with Relevant Experience as an Advocate for Victims’ Rights. You can find out more about these appointments HERE.

Surveys for Public Input

Medical cannabis and the patient registry program. Deadline to provide input is Feb. 26.

This is the FINAL scheduled survey.

North Star is doing this webinar with Morem & Waller (an excellent cannabis accounting firm in town) next week. Free and online!

1. File Your Business’s Annual Renewal with the Minnesota Secretary of State

All Minnesota LLCs and other entity forms, as well as Certificates of Assumed Name, must complete a (free) Annual Renewal in every calendar year after formation. Your entity will be “statutorily dissolved” (no longer be recognized as existing in Minnesota) if you fail to file your annual renewal.

This is a great time to do both 2023 (if you didn’t do it) and 2024 and get them done!

Steps to file your annual renewal can be found HERE.

1. File Your Business’s Annual Renewal with the Minnesota Secretary of State

All Minnesota LLCs and other entity forms, as well as Certificates of Assumed Name, must complete a (free) Annual Renewal in every calendar year after formation. Your entity will be “statutorily dissolved” (no longer be recognized as existing in Minnesota) if you fail to file your annual renewal.

This is a great time to do both 2023 (if you didn’t do it) and 2024 and get them done!

Steps to file your annual renewal can be found HERE.

2. Update Company Policies to be Compliant with Minnesota’s New Sick and Safe Time Requirements

Effective Jan. 1, 2024, Minnesota’s earned sick and safe time law requires employers to provide paid leave to employees who work in the state. Generally, all employers will need to give employees notice of the new law and update their employee handbook, and employers who do not offer unlimited PTO will need to ensure that their PTO arrangements meet the new minimum standards, and update their PTO/payroll tracking system.

Resources including basic information, employee notice, workplace posters, and video overviews can be found HERE.

Our full alert about Minnesota’s earned sick and safe time law can be found HERE.

3. If Applicable, Confirm Your Hemp-Derived Business is Registered with the Minnesota Department of Health

If you sell hemp-derived cannabinoid products to the public in Minnesota, you must register with the Minnesota Department of Health (if you have not already done so. At this point this is a one-time filing). The form to register your hemp-derived cannabinoid business can be found HERE.

If you are unsure whether your hemp-derived cannabinoid business is registered, you can check by either using the map or downloading the Excel file which can be found HERE.

4. Review Governing Documents

We strongly advise our clients to enter into an Operating Agreement for all multi-member LLCs and other forms of entity with more than one owner. An Operating Agreement provides how the owners will make decisions and what happens if one of the owners dies or wants to leave. It also clearly sets out the percentages in which the owners own the company, generally in the back on Exhibit A.

If you have an Operating Agreement, consider whether you need to amend it (e.g. to reflect new partners, a changed business model, etc.)

And if you don’t have an Operating Agreement yet, please contact us to get one started. Generally you will need it to open a bank account and for licensing, as well as peace of mind on having these important matters documented.

Continuing Black History Month, this weeks episode features Liza Maya and Sylvia Williams, creators of Soul Grain, a small-batch granola (both THC-infused and traditional).

Click the Spotify link below to tune in.