Letting growers grow in Minnesota

An open secret about DEA and rescheduling?

Wednesday, May 29, 2024

Good morning.

While loads of attention has been paid to what’s happening on the federal level over the past few weeks, let’s not sleep on Minnesota. The State of Hockey is on the verge of going legal, and they’ll get growing ASAP.

Let’s get to it.

-JB & JR

This newsletter is 850 words or about an 4-minute read. 

💡What’s the big deal?

Kick starting Minnesota’s growing cannabis market

Driving the news: A full-blown, adult-use cannabis market is still at least a year off in the land of 10,000 lakes. But the governor signed a bill yesterday that will (try to) ensure that when the market does open up, there is actually cannabis on shelves.

What happened: In order to meet the demand of a legal cannabis market, advocates pushed the Minnesota legislature to open up the initial round of cannabis cultivation licenses to get growers growing. 

They wanted their state to be different, given how other jurisdictions have not met initial cannabis demand with initial cannabis supply, So, they advocated for pre-market launch cultivation.

Governor Tim Walz signed the bill yesterday.

What they’re saying: Cultivated checked in with Minneapolis-based Jason Tarasek of Vicente LLP on what this bill means on the ground. Here’s his take: “This new legislation will allow Minnesota’s adult-use cannabis market to finally get started in earnest. Although our hemp-derived edibles market has flourished since 2022, Minnesotans are ready to smoke homegrown cannabis. With the governor’s signing of this bill, Minnesota cannabis cultivators can get growing as soon as this fall.” 

But, don’t be New York! Minnesota isn’t the first state to think ahead to cannabis opening day. New York also allowed growers to start before the legal market opened. 

But, in New York, those growers were promised dispensary shelves would be open when the harvest was complete. That didn’t happen. 

Now these same New York growers are struggling. In a recent Cultivated Live interview, cannabis industry lobbyist Joe Rossi used colorful language to describe the situation for early New York growers:

“These conditional cultivators got f-ed. The math that was used saying we were going to have 20 dispensaries open every month of 2023, they made plans based on that. And here we are celebrating the 120th store in the middle of 2024. You can’t over promise and under deliver.”

What’s next: Licensing of the initial cultivators will be through a “vetted lottery” providing social equity applicants preference to get their cultivation operations off the ground this year.


💬 Quote of the day

From yesterday’s Cultivated Live with Joanne Caceres at the law firm Dentons: “The president is right that this [Rescheduling] is a major step. I think the big thing I want to make sure people know is it's not the final step. It's actually kind of a beginning step.” 

Caceres shared her thoughts about the careful wording of the DEA’s Notice of Proposed Rulemaking

“So if you look at the NPRM itself you get to page 13  And what you see is "the DEA has not determined the appropriate Schedule" So that is, I would say, unusual…It's saying we actually haven't made our final determination which basically means that there's at least some faction of the DEA that is not convinced by the FDA's recommendation. Somewhat reading between the lines, but it's kind of an open secret: There's not total agreement within the DEA that schedule 3  is appropriate.

Quick hits

South African President Cyril Ramaphosa signed a bill that legalizes cannabis cultivation and possession in the country. The bill, however, doesn’t permit cannabis sales — so people will have to grow and smoke within the comfort of their own homes. 

New York’s 2025 budget enacted rules allowing for further crackdowns on illicit cannabis shops in the state. Yesterday, the NY Office of Cannabis Management Tweeted what the padlocking of these stores looks like in real life. 

Maine’s Republican Senator Susan Collins is asking the federal government to help local law enforcement in her state to help crack down on illicit cannabis growers. She told WGME, “There’s indication that many of them are run by Chinese cartels, and this is something that I’ve been pushing the federal government to help our county sheriffs, state, and local law enforcement to close down these operations and arrest those involved…”

🤓 What we’re reading

🚀 Deals, launches, partnerships

Last year, Alleaves acquired MJ Freeway and BioTrack — two of the three most well-known cannabis “track-and-trace” systems utilized by jurisdictions throughout the US. (The third is Metrc, which is the largest.) Yesterday, Alleaves announced MJ Freeway and BioTrack would be merged into one entity.

😜 One fun thing

If you’re in LA between May 30th and the end of July, you might want to check out Reefer Madness – The Musical. According to their ticketing page: “Reefer Madness delivers a fresh take on the cult-classic musical, blending outrageous satire and dazzling performances.” Get your tickets today!

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