With consumers legally allowed to possess and consume marijuana but few legal outlets available to procure products, state officials worry about the negative impact of the ever-present black market.
When a state passes cannabis legalization reform, there is an initial burst of euphoria as advocates, stakeholders, and consumers celebrate the once-forbidden act of “sparking one up” or taking an “awesome hit” from a bong. And while the act of smoking or ingesting marijuana products is now legal, there is that annoying detail of creating a regulatory infrastructure and establishing guidelines for safety and the all-important licensing process.
Some states, like Michigan, streamline the procedure, allowing unlimited licenses, lower taxes, and fewer rules and regulations to follow. Others, like New York, Maryland, and California, have incredibly burdensome guidelines, high taxes, and a tedious and expensive limited licensing program.
Each system has its own unique benefits and challenges. However, in some cases, like the state of Minnesota’s recent passage of adult-use marijuana legalization reform this past summer, the cost of setting up a comprehensive regulatory infrastructure can be quite high and potentially damaging.
As first reported by Marijuana Moment, officials in the North Star state are concerned about the effects of their legalization process, particularly the short-term reliance on “unregulated sources” by consumers waiting for retail dispensaries to open.
While there are a few Native American Tribal-Run retail establishments currently selling cannabis products to the general public, Minnesota regulators say the number of residents reporting the use of those unregulated sources to purchase items remains substantial as regulators and lawmakers work to implement the legal and regulated market.
As a result, the Minnesota Office of Cannabis Management (OCM) issued a pair of reports this week, which, in part, recommended specific legislative fixes to speed up the licensing process so consumers can begin obtaining cannabis within a regulated system. In addition, The OCM reports also indicated that Minnesota will need a minimum of 381 retail shops to comply with the legalization measure.
During the survey process, a significant majority of Minnesotans who said they acquired cannabis in the past month reported getting their marijuana offerings from:
- Family and Friends (67.6%)
- Low-THC Hemp Shops (61.3%)
- An Illicit Seller (53.4%)
- Medical Cannabis Dispensary (42.7%)
“These findings are not uncommon in other states as adult-use possession and gifting laws become effective and the perceived risk of criminality is reduced while adult-use sources are not available. Importantly, these data suggest an overall high prevalence of obtaining cannabis from a dealer, an illicit source, among Minnesota residents, which stands to reason as legal adult-use sources are not fully available.” OCM said.
"These findings are not uncommon in other states as adult-use possession and gifting laws become effective and the perceived risk of criminality is reduced while adult-use sources are not available. Importantly, these data suggest an overall high prevalence of obtaining cannabis from a dealer, an illicit source, among Minnesota residents, which stands to reason as legal adult-use sources are not fully available."
- OCM Report on Legislative Recommendations for MN Cannabis Market
The statistics are somewhat alarming. However, with law enforcement officials concerned about other more pressing issues like the overdose epidemic and precious few options available, many cannabis connoisseurs are still very reliant on their tried and true black market sources.
“For instance, the highest proportion of cannabis obtained by participants was from a dealer (17.6 percent), and participants reported the highest likelihood of visiting a dealer more than once a month to purchase cannabis compared to other source types,” the OCM report details.
"For instance, the highest proportion of cannabis obtained by participants was from a dealer (17.6 percent), and participants reported the highest likelihood of visiting a dealer more than once a month to purchase cannabis compared to other source types."
- OCM Report on Legislative Recommendations for MN Cannabis Market
Some of the legislative recommendations sought by the OCM to expedite the licensing process and “reduce the risk of bottlenecks” include removing the current requirement that prospective licensees secure a retail storefront compliant with state regulations before submitting an application.
The OCM also encouraged lawmakers to consider eliminating the provision allowing local government to have input on the applications, which could lead to litigation. Finally, the office suggested that the state house adopt a “mechanism to issue temporary licenses through statute, particularly for social equity applicants.”
“These recommendations allow for a more streamlined and transparent approach to licensing that will assist in applicant comprehension and allow for licenses to be issued in an expedited fashion,” the report says.
"These recommendations allow for a more streamlined and transparent approach to licensing that will assist in applicant comprehension and allow for licenses to be issued in an expedited fashion."
- OCM Report on Legislative Recommendations for MN Cannabis Market
Overall, the message from the OCM and other state officials was clear. The process needs to be simplified, more convenient, and affordable. Hopefully, the office’s recommendations will be considered and implemented sooner than later.
With Michigan just reporting a record $3 Billion in recreational marijuana sales for 2023 and Ohio joining the ranks of states with legal and regulated adult-use cannabis this past Election Day, the competition is only getting stiffer and more entrenched. It’s time for Minnesota to take the stage and shine.
