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As the final weeks of the Minnesota legislative session approach, marijuana advocates and stakeholders still expect both the state Senate and House of Representatives to pass an adult-use legalization bill before adjourning next month.
But some stakeholders are giving a tepid reception to the substance of the legislation so far, particularly its equity measures.
“When we first started at the beginning of the year, we had high hopes for what we thought this bill was going to achieve,” said Angela Dawson, a central Minnesota hemp farmer and president and CEO of 40 Acre Co-op. “But as much as people say they have good intentions when it comes to equity, shit falls apart.”
Marcus Harcus, a lobbyist for local hemp and CBD company Uniflora Holistics, has similar mixed feelings.
“We are getting some things that we want, but there’s just so many bad ideas in there,” he said.
The lawmakers behind the legislation, however, are promising to push one of the most equitable marijuana legalization laws in the nation.
“We have an obligation to make sure that there is a level of opportunity for folks who have been harmed and whose communities have been harmed to succeed in this industry,” said Senator Lindsey Port, DFL-Burnsville, chief author of the Senate bill.
State Representative Zack Stephenson, DFL-Coon Rapids, is chief author of the House bill. He touted its provisions expunging criminal marijuana convictions and state grants tailored to diverse businesses seeking entry into the legal marijuana market. Stephenson calls those provisions the “beating heart of the equity” within the legislation.
“Those are still strong, robust, and an important part of the bill,” he said.
But some things have also changed in the bill throughout the lengthy committee process. The House version has gone through 15 committees and the Senate version through 11 committees. The House version has one more committee to go through before a floor vote. The Senate version has two more committees to pass before then.
Dawson said the legislation ultimately caters to big businesses. She’s particularly frustrated about how the Senate bill doesn’t subject the two multi-state operators currently producing marijuana for the state’s Medical Cannabis Program to the same regulations as businesses like hers that want to get involved in the legal marijuana market.
The Senate legislation, for example, wouldn’t support marijuana licenses for businesses with facilities larger than 15,000 square feet, but would grandfather in the two medical marijuana businesses, which both have operations bigger than the requirement.
The two existing marijuana manufacturers in Minnesota are New York-based Vireo Health and Chicago-based Green Thumb Industries. Both operate facilities larger than the proposed 15,000-square-feet limit. Green Thumb Industries, for example, operates two marijuana facilities in Cottage Grove totaling more than 177,000 square feet.
If Dawson starts growing marijuana in a legal market, the current legislation wouldn’t allow her to transport marijuana between her two farm sites. Instead, she would have to hire a “cannabis transportation company” to do that work, as outlined in the bill.
“They already have the infrastructure, support, and 10-year dominance of the market,” Dawson said of Vireo and Green Thumb. “The whole system is set up for people who already have the resources to be successful.”
Vireo declined to comment, and Green Thumb Industries did not respond to requests for comment before press time.
‘Do we raise all bulk?’
Deciding how to allow the two medical providers to operate in the recreational market is still something all sides are figuring out.
“Do we raise all bulk to the level that’s required to meet the current medical need?” Port said. “Do we grandfather in the medical [suppliers] for a few years? We’re looking at various options.”
Under the current Senate bill, the two providers would be required to meet all medical marijuana demand before producing marijuana products for the recreational market. Port said it’s important for the Vireo and Green Thumb to continue their current capacity to meet medical demand.
“We do not want there to be a shortage of medical marijuana that our patients are relying on,” she said.
Port added that the idea of requiring licensed marijuana transporters came from similar regulations in the alcohol industry. She said that requirement may ultimately be dropped from the bill.
Currently, the Senate bill would bar people with prior felonies from working in the industry, while the House bill would allow the to-be-established Office of Cannabis Management to decide whether someone with a prior felony could work in the industry. Port pledged that the Senate bill will change to reflect the House bill on felonies in the conference committee.
Harcus lamented the dropping of provisions in the House bill that would have encouraged businesses seeking marijuana licenses to draft plans to employ a diverse ownership, staff, and contractors.
He also called a change in the bill that lowered legal personal possession of marijuana from five pounds to 1.5 pounds “prohibition-lite,” saying that it would still criminalize some people.
The bill has also went from requiring no licensing renewal fees–which Harcus previously praised as opening doors for low-income businesses—to introducing a tiered renewal fee system for most of its licenses. The legislation proposes 15 different types of marijuana and hemp business licenses, most of which would include renewal fees ranging from $250 for hemp edibles retailers to $5,000 for marijuana retailers, $20,000 for a marijuana manufacturer, and $30,000 for a marijuana cultivator.
“Not everybody has that kind of money,” Harcus said. “That’s going to create a barrier for entry.”
Stephenson, for his part, pointed out that the bill’s original language made submitting a diversity plan optional. He added that the 1.5 pounds individuals would be able to legally possess under the current bill is “reasonably high” and “still a very large amount of cannabis.”
“One of the goals of the bill is to transition from an illicit marketplace into a legitimate marketplace,” Stephenson said. “That’s not just something that happens overnight. There needs to be some controls to try and encourage folks to move into the legitimate marketplace.”
Stephenson also defended the proposed license renewal fees, contending that the different fees for different tiers of licensing make the proposed renewal fee system more fair and equitable. He highlighted how the bill has a lower renewal fee—$2,000—for marijuana microbusinesses, or small businesses.
One equity measure that has always been in the bill would give a weighted score to obtain business licenses to “social equity applicants.”
Dawson emphasized that the help to receive a business license is good, but can only go so far.
“That doesn’t address all of the compliance, the equipment, the investment, and maintaining the license,” she said. “We just got a couple of points to get the damn license.”
Dawson has pushed to broaden the bill’s definition of social equity applicants, and in some cases she and other advocates were successful. When the bill was introduced, it used income and zip codes to determine whether a business would be considered a social equity applicant. It’s since added individuals previously convicted of marijuana offenses and socially disadvantaged farmers to the definition.
Nathan Ratner, co-founder of The Great Rise, an organization pushing for equity in marijuana legislation, praised those additions, particularly the inclusion of people convicted of marijuana offenses, which also includes their spouse, children, and other family members.
“This is important to acknowledge how those who have the marijuana offenses are impacted,” Ratner said. “Their families are often really harmed, if not destroyed, as well.”
Dawson and Harcus are already looking ahead to action in a conference committee, for which House and Senate leadership pick a handful of legislators to resolve differences between both versions of the bill. If an agreement can be struck in that committee, the House and Senate will vote on new, identical bills for the governor to sign.
The prospect of how the bill could change in the conference committee has both Dawson and Harcus worried over what equity provisions could be dropped to reconcile differences between the House and Senate bills.
Dawson is also concerned about who will have access to legislators during the conference committee process and who won’t. One of the multistate operators, Green Thumb Industries, has four registered lobbyists.
“It makes me super nervous, because I don’t have a paid lobbyist,” Dawson said.
Added Harcus: “It really matters who’s on the inside.”
Usually, conference committees meet behind closed doors.
Stephenson pledged that the conference committee will be “as open and as transparent a process” as can be. He emphasized that the bill has been through countless hours of public hearings through the committee process this year.
“The amount of ability for the public to interact with this bill is unprecedented,” he said.
Port, in an interview, she wants the conference committee hearings for the legislation to be public, including open for comments.
“This will be one of the most closely watched conference committees in a while, so we are intending to make it as transparent as possible,” she said.
If legalization succeeds this year, Dawson still expects legislators to have to work on a big fix bill next year. If so, she said she may visit the State Capitol more than the 10 times she’s done this year to help influence the bill.