How to Start a Cannabis Business in Minnesota?

Main steps in short:

Understand regulatory and legal requirements. Do market research.

Research the laws and regulations governing adult-use or medical-use cannabis for more information about the regulatory requirements for licensure in the city or town you wish to operate.

Minnesota Cannabis Legalization

Minnesota became the 22nd state to legalize medical cannabis in 2014 and the 23rd state to legalize adult-use cannabis in 2023.

The Office of Cannabis Management (OCM) is responsible to release applications, issue licenses, and develop regulations outlining how and when businesses can participate in the new cannabis industry (medical and adult-use) in Minnesota.

Testing facility, microbusiness, transporter, wholesaler, event organizer, and delivery service licenses are not limited in quantity. Cultivator licenses are capped at 50, mezzobusiness licenses are capped at 100, manufacturer licenses are capped at 24, and retailer licenses are capped at 150. The cultivator, mezzobusiness, manufacturer, and retailer licenses are issued through licensing lotteries. The first licensing lottery was held on June 5, 2025, where 249 applicants for a recreational cannabis business license were selected, including 50 cultivator, 24 manufacturer, 100 mezzobusiness and 75 retailer social equity licenses. The second licensing lottery for retailers was held on July 22 with applications accepted from both general applicants and social equity applicants. Among a total of 569 applicants, 75 were selected.

On August 1, 2025, an ongoing application window opened for cannabis testing facilities and cannabis event organizer licenses.

Minnesota Cannabis Market

Decide the type of cannabis business. Choose a location. Check local zoning regulations.

Cannabis Licenses Types available in Minnesota

Check your eligibility as a social equity applicant as this can increase your chances of being selected in a lottery. Eligibility criteria can be found on the OCM’s website. If you qualify as a social equity applicant, make sure to be verified. The OCM has a detailed guide for social equity verification.

Cultivator

“A cannabis cultivator license entitles the license holder to grow cannabis plants within the approved amount of space from seed or immature plant to mature plant, harvest cannabis flower from a mature plant, package and label immature cannabis plants and seedlings and cannabis flower for sale to other cannabis businesses, transport cannabis flower to a cannabis manufacturer located on the same premises, and perform other actions approved by the office.”

Activities and products allowed:

Can grow up to 30,000 square feet of plant canopy indoors or up to 2 acres of mature flowering plants outdoors.
Can sell immature cannabis plants, seedlings, and cannabis flower to other cannabis businesses.

Other licenses that can be held simultaneously:

Cannabis manufacturer.
Cannabis event organizer.

(application fee $10,000; initial license fee $20,000; renewal license fee $30,000)

Manufacturer

“A cannabis manufacturer license entitles the license holder to: (1) purchase cannabis flower, cannabis products from a cannabis microbusiness, a cannabis mezzobusiness, a cannabis cultivator, another cannabis manufacturer, or a cannabis wholesaler; (2) make cannabis concentrate; (3) manufacture adult-use cannabis products for public consumption; (4) package and label adult-use cannabis products for sale to customers; (5) sell cannabis concentrate, cannabis products to other cannabis businesses; and (6) perform other actions approved by the office.”

Activities and products allows:

Can transport from cultivation site to manufacturing site on same premises under same license holder.
Can sell cannabis concentrate, hemp concentrate, artificially derived cannabinoids, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products to other cannabis businesses.

Other licenses that can be held simultaneously:

Cannabis cultivator.
Cannabis event organizer.

(application fee $10,000; initial license fee $10,000; renewal license fee $20,000)

Retailer

“A cannabis retailer license entitles the license holder to: (1) purchase immature cannabis plants and seedlings, cannabis flower, cannabis products from cannabis microbusinesses, cannabis mezzobusinesses, cannabis cultivators, cannabis manufacturers, and cannabis wholesalers; (2) sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabis products, and other products authorized by law to customers; and (3) perform other actions approved by the office.”

Activities and products allowed:

Can operate up to 5 retail locations. No person, cooperative, or business may hold a license to own or operate more than one cannabis retail business in one city and three retail businesses in one county.
Can sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, hemp-derived consumer products, and other products authorized by law to adults over 21 years of age and registered medical patients.

Other licenses that can be held simultenously:

Cannabis event organizer.
Cannabis delivery service.

(application fee $2,500; initial license fee $2,500; renewal license fee $5,000)

Wholesaler

“A cannabis wholesaler license entitles the license holder to: (1) purchase immature cannabis plants and seedlings, cannabis flower, cannabis products from cannabis microbusinesses, cannabis mezzobusinesses, cannabis cultivators, cannabis manufacturers, and cannabis microbusinesses; (2) sell immature cannabis plants and seedlings, cannabis flower, cannabis products to cannabis microbusinesses, cannabis mezzobusinesses, cannabis manufacturers, and cannabis retailers; and (3) perform other actions approved by the office.”

Other licenses that can be held simultaneously:

Cannabis transporter.
Cannabis event organizer.
Cannabis delivery service.

(application fee $5,000; initial license fee $5,000; renewal license fee $10,000)

Transporter

“A cannabis transporter license entitles the license holder to transport immature cannabis plants and seedlings, cannabis flower, cannabis products from cannabis microbusinesses, cannabis mezzobusinesses, cannabis cultivators, cannabis manufacturers, cannabis wholesalers, medical cannabis retailers and processors to cannabis microbusinesses, cannabis mezzobusinesses, cannabis manufacturers, cannabis testing facilities, cannabis wholesalers, cannabis retailers, medical cannabis processors and retailers, and medical cannabis combination businesses and perform other actions approved by the office.”

Other licenses that can be held simultaneously:

Cannabis wholesaler.
Cannabis event organizer.
Cannabis delivery service.

(application fee $250; initial license fee $500; renewal license fee $1,000)

Testing Facility

“A cannabis testing facility license entitles the license holder to obtain and test immature cannabis plants and seedlings, cannabis flower, cannabis products from cannabis microbusinesses, cannabis mezzobusinesses, cannabis cultivators, cannabis manufacturers, cannabis wholesalers, medical cannabis cultivators, processors and combination businesses.”

No other licenses can be held simultaneously.

(application fee $10,000; initial license fee $10,000; renewal license fee $20,000)

Event Organizer

“A cannabis event organizer license entitles the license holder to organize a temporary cannabis event lasting no more than four days.”

Activities and products allowed:

Events require local approval, must be strictly limited to ages 21 and older, and may not include the sale or consumption of alcohol. There may be on-site sale and use of adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products.
Event organizers can designate areas for on-site cannabis consumption and allow sale of cannabis plants, adult-use cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products by licensed cannabis retailers, licensed microbusinesses or mezzobusinesses with a retail operations endorsement, licensed medical cannabis combination businesses operating a retail location, or a licensed lower-potency hemp edible (LPHE) retailer.

Other licenses that can be held simultaneously:

Cannabis microbusiness
Cannabis mezzobusiness
Cannabis cultivator
Cannabis manufacturer
Cannabis retailer
Cannabis wholesaler
Cannabis transporter
Cannabis delivery service

(application fee $750; initial license fee $750)

Delivery Service

“A cannabis delivery service license entitles the license holder to purchase cannabis flower, cannabis products from licensed cannabis microbusinesses with a retail endorsement, cannabis mezzobusinesses with a retail endorsement, cannabis retailers, medical cannabis retailers, and medical cannabis combination businesses; transport and deliver cannabis flower, cannabis products to customers; and perform other actions approved by the office.”

Licenses that can be held simultaneously:

Cannabis retailer.
Cannabis wholesaler.
Cannabis transporter.
Cannabis event organizer.

(application fee $250; initial license fee $500; renewal license fee $1,000)

Microbusiness

“A cannabis microbusiness license, consistent with the specific license endorsement or endorsements, entitles the license holder to perform any or all of the following within the established limits:

(1) grow cannabis plants from seed or immature plant to mature plant and harvest cannabis flower from a mature plant;
(2) make cannabis concentrate;
(3) make hemp concentrate, including hemp concentrate with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent as measured by weight;
(4) manufacture artificially derived cannabinoids;
(5) manufacture adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for public consumption;
(6) purchase immature cannabis plants and seedlings and cannabis flower from another cannabis microbusiness, a cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler;
(7) purchase hemp plant parts and propagules from an industrial hemp grower licensed under chapter 18K;
(8) purchase hemp concentrate from an industrial hemp processor licensed under chapter 18K;
(9) purchase cannabis concentrate, hemp concentrate, and artificially derived cannabinoids from another cannabis microbusiness, a cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler for use in manufacturing adult-use cannabis products, lower-potency hemp edibles, or hemp-derived consumer products;
(10) package and label adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for sale to customers;
(11) sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, hemp-derived consumer products, and other products authorized by law to other cannabis businesses and to customers;
(12) operate an establishment that permits on-site consumption of edible cannabis products and lower-potency hemp edibles; and
(13) perform other actions approved by the office.”

Size limitations:

A cannabis microbusiness that cultivates cannabis at an indoor facility may cultivate up to 5,000 square feet of plant canopy.
A cannabis microbusiness that cultivates cannabis at an outdoor location may cultivate up to one-half acre of mature, flowering plants unless the office increases that limit.
A limit on the manufacturing of cannabis products must be equivalent to the amount of cannabis flower that can be harvested from a facility with a plant canopy of 5,000 square feet in a year.
A cannabis microbusiness with the appropriate endorsement may operate one retail location.

(application fee $500; no initial license fee; renewal license fee $2,000)

Mezzobusiness

“A cannabis mezzobusiness license, consistent with the specific license endorsement or endorsements, entitles the license holder to perform any or all of the following within the established limits:

(1) grow cannabis plants from seed or immature plant to mature plant and harvest cannabis flower from a mature plant for use as adult-use cannabis flower or for use in adult-use cannabis products;
(2) grow cannabis plants from seed or immature plant to mature plant and harvest cannabis flower from a mature plant for use as medical cannabis flower or for use in medical cannabinoid products;
(3) make cannabis concentrate;
(4) make hemp concentrate, including hemp concentrate with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent as measured by weight;
(5) manufacture artificially derived cannabinoids;
(6) manufacture adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for public consumption;
(7) process medical cannabinoid products;
(8) purchase immature cannabis plants and seedlings and cannabis flower from a cannabis microbusiness, another cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler;
(9) purchase cannabis concentrate, hemp concentrate, and synthetically derived cannabinoids from a cannabis microbusiness, another cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler for use in manufacturing adult-use cannabis products, lower-potency hemp edibles, or hemp-derived consumer products;
(10) purchase hemp plant parts and propagules from a licensed hemp grower licensed under chapter 18K;
(11) purchase hemp concentrate from an industrial hemp processor licensed under chapter 18K;
(12) package and label adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for sale to customers;
(13) sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, hemp-derived consumer products, and other products authorized by law to other cannabis businesses and to customers; and
(14) perform other actions approved by the office.”

Size limitations:

(a) A cannabis mezzobusiness that cultivates cannabis at an indoor facility may cultivate up to 15,000 square feet of plant canopy. The office may adjust plant canopy limits upward to meet market demand consistent with the goals identified in section 342.02, subdivision 1.
(b) A cannabis mezzobusiness that cultivates cannabis at an outdoor location may cultivate up to one acre of mature, flowering plants unless the office increases that limit. The office may increase the limit to no more than three acres if the office determines that expansion is consistent with the goals identified in section 342.02, subdivision 1.
(c) The office shall establish a limit on the manufacturing of cannabis products, lower-potency hemp edibles, or hemp-derived consumer products a cannabis mezzobusiness that manufactures such products may perform. The limit must be equivalent to the amount of cannabis flower that can be harvested from a facility with a plant canopy of 15,000 square feet in a year but may be increased if the office expands the allowable area of cultivation under paragraph (a).
(d) A cannabis mezzobusiness with the appropriate endorsement may operate up to three retail locations.

(application fee $5,000; initial license fee $5,000; renewal license fee $10,000)

Medical Cannabis Licenses

“Medical cannabis combination businesses can grow medical and adult-use cannabis (subject to law); manufacture medical and adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products; package and label those products; and purchase immature cannabis plants and seedlings, cannabis flower, cannabis products, hemp concentrate, and artificially derived cannabinoids from businesses licensed to sell those products.”

Medical cannabis cultivator (application fee $250; no initial license fee; no renewal license fee)
Medical cannabis processor (application fee $250; no initial license fee; no renewal license fee)
Medical cannabis retailer (application fee $250; no initial license fee; no renewal license fee)
Medical cannabis combination business (application fee $10,000; initial license fee $20,000; renewal license fee $70,000)

Full vertical integration is prohibited except for microbusiness and mezzobusiness.

Which States Allow Vertical Integration?

Cannabis Delivery in Minnesota

A cannabis delivery service license entitles the license holder to purchase cannabis flower, cannabis products from licensed cannabis microbusinesses with a retail endorsement, cannabis mezzobusinesses with a retail endorsement, cannabis retailers, medical cannabis retailers, and medical cannabis combination businesses; transport and deliver cannabis flower, cannabis products to customers; and perform other actions approved by the office.

Cannabis Delivery Service by State

Develop a solid cannabis business plan . Secure financing.

Application requirements include a business plan showing the expected size of the business; anticipated growth; the methods of record keeping; the knowledge and experience of the applicant and any officer, director, manager, and general partner of the business; and other relevant financial and operational components.

Find more

'70% ready to go' business plan templates

We offer a wide range of '70% ready-to-go' cannabis business plan templates that will help you prepare a professional cannabis business plan document supported with expert financials and an investor pitch deck. All our templates are completely open and editable and you can use Word, Excel and PowerPoint to work with them.

Prepare the required documents. Submit applications. Pay fees.

An applicant must submit all required information to the office on the forms and in the manner prescribed by the office, which may include, but is not limited to the following:

the name, address, and date of birth of the applicant;
valid photo ID issued by a governmental or Tribal agency;
the disclosure of ownership and control;
capitalization table(s);
the disclosure of whether the applicant or, if the applicant is a business, any officer, director, manager, and general partner of the business has ever filed for bankruptcy;
the address and legal property description of the business;
a general description of the location or locations that the applicant plans to operate, including the planned square feet of planned space for cultivation, wholesaling, and retailing, as applicable;
preliminary security plan;
preliminary Training and Educational Plan for Employees;
preliminary SOP Quality Assurance;
preliminary SOP Inventory Control, Storage, and Diversion Prevention;
preliminary SOP Accounting and Tax Compliance;
preliminary Operation Plan;
cultivation Plan (if applicable);
proof of trade name registration provided from Minnesota secretary of state;
preliminary business plan;
an attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement;
proof that the applicant is a social equity applicant (if applicable); and
a statement that the applicant agrees to respond to the office’s supplemental requests for information.

The applicant must also pay the relevant application fee.

Preliminary license approval.

Uncapped License Approval

If your application passes, you become a qualified applicant. You must complete required background checks and submit your labor peace agreement (not applicable for microbusinesses with less than 10 employees) to the OCM. You then become a preliminarily approved applicant.

Capped License Approval

If your application passes, you are entered into a randomized lottery selection. If your application is chosen in the lottery, you become a qualified applicant. You must complete required background checks and submit your labor peace agreement (not applicable for microbusinesses with less than 10 employees) to the OCM. You then become a preliminarily approval applicant.

Final submissions, site registration, local government approval.

Applicants have 18 months to become fully licensed. The steps towards becoming fully licensed are the following:

Secure a business location. The OCM encourages applicants to communicate closely with their local government to ensure that the location they secure complies with zoning regulations.
Submit finalized application documents to the OCM:
- Site, Security, and Operations Final Plan of Record, including facility diagrams.
- Inventory Control and Diversion Prevention SOP Final Plan of Record.
- Quality Assurance SOP Final Plan of Record.
- Accounting and Tax Compliance SOP Final Plan of Record.
- If planning to carry out transport of cannabis: a vehicle disclosure form and a surety bond (transportation licensees only) must be submitted.
- If planning to carry out manufacturing or cultivation of cannabis activities: inspection certificates issued by an independent third-party industrial hygienist or professional engineer must be submitted.
The OCM will send the application to the applicant’s local government for zoning compliance. The local government must respond within 30 days. Once the local government confirms that the applicant’s business meets all zoning regulations and other local rules and ordinances, they may proceed to the inspection.
Undergo a full pre-licensure inspection by the OCM and partner agencies.
Once the inspection has been passed, the initial license fee must be paid.

After completing these steps, the OCM will issue the cannabis business license and the licensee may begin operations.

It must be noted that cannabis retailer licensees, medical cannabis combination business licensees, and microbusiness and mezzobusiness licensees with retail endorsement, must obtain a retail registration from their local government before they can start cannabis sales.

Register your business as an employer and a tax payer.
Keep track of your ongoing compliance requirements.

Physical security measures, good production practices, packaging, labelling, transport and reporting requirements, taxes and more.

Minnesota Cannabis Taxes

Starting July 1, 2023, all sellers of taxable cannabis products must register with the Minnesota Department of Revenue to remit the new gross receipts tax of 10%. The tax is imposed on the retail sale of cannabis and cannabis products, as well as low-potency, hemp-derived edible cannabinoid products. The state general sales tax of 6.875%, and any local general sales taxes also apply to sales of cannabis and cannabis products. Sales that are exempt from these taxes include:

Products purchased on an Indian reservation from a seller licensed by the tribe.
Medical cannabis, which are items purchased by or for a patient enrolled in the state’s medical cannabis registry program.
Retailers purchasing the product for resale. Retailers sell products to the end customer and are responsible for collecting sales tax on the product.

Licensed cannabis businesses in Minnesota are allowed the cannabis income tax subtraction for expenses that were not allowed on their federal return under Internal Revenue Code, section 280E. The expenses must be related to the business of cannabis or hemp.

280E Deductions by State

Cannabis Advertising Regulations in Minnesota

Cannabis businesses may display up to two fixed outdoor signs on the exterior of the building or property of the cannabis business, other types of an an outdoor advertisement of a cannabis business are prohibited.

A cannabis business shall not publish or cause to be published an advertisement for a cannabis business in any print publication or on radio, television, or any other medium if 30 percent or more of the audience of that medium is reasonably expected to be individuals who are under 21 years of age, as determined by reliable, current audience composition data.

A cannabis business shall not utilize unsolicited pop-up advertisements on the Internet to advertise a cannabis business or cannabis products.

(Minn. Stat. § 342.64)