House adopts robust amendment to DFL marijuana bill creating hemp licensing system

Minnesota House members adopted a hefty amendment to the chamber’s bill to legalize recreational marijuana on Monday, including provisions like the creation of a separate licensing system for Minnesota hemp growers and the low-dose THC products their crops are used for now.

The 155-page amendment creates new hemp licenses that allow a manufacturer to produce and sell low-potency hemp edibles, but it doesn’t permit them to handle stronger potency cannabis. Prior to lawmakers adopting the amendment, hemp and cannabis were lumped into the same licensing category.

In current Minnesota law, hemp and cannabis differ by how much THC they contain. That’s the component that gives a user the “high” feeling.

Lawmakers adopted the amendment after concerns from the hemp industry that if their licenses were the same as those growing or selling cannabis — which the federal government classifies as a Schedule 1 drug — they wouldn’t be able to deduct their business expenses from federal income tax filings. The tax deductions aren’t available for illegal substances.

The marijuana legalization bill being considered in the House and Senate have gone through well over a dozen committee hearings each, with several more to go. The House Commerce and Finance Policy Committee on Monday referred the bill to the Taxes Committee, where the bill is likely to receive its first fiscal note, which calculates how much the bill will either earn or cost the taxpayers.

It’s unclear whether the marijuana legalization has enough support in the Senate to pass with Democrats’ one-seat majority. Multiple DFL senators, including a few freshmen senators from greater Minnesota districts, have expressed concern or declined to express their views on marijuana legalization.

For example, Sen. Grant Hauschild, DFL-Hermantown, told MinnPost shortly after the election that he’s in favor of legalizing marijuana; however, earlier this month Hauschild declined to tell the Star Tribune whether he supports legalizing it.

The amendment approved on Monday also reduces the amount of cannabis a person can legally have in their home — from 5 lbs to 1.5 lbs. An eighth of an ounce of cannabis can produce four or more robust marijuana cigarettes, which means the amended bill would allow a person to possess at least 750 joints. 

Similar to a few of the 21 other states that have allowed recreational marijuana use, Minnesota’s marijuana bill includes a number of provisions to establish a cannabis industry that attempts to atone for its role in the War on Drugs that tended to ensnare Black, Hispanic, Native and low-income Minnesotans while more affluent, white people were able to use drugs with relatively little legal consequence.

Minnesota’s cannabis bill establishes “social equity applicants” who can apply for cannabis or hemp licenses. The state government would use a point system to determine who should be granted a license on a variety of criteria — one of which includes whether they are a social equity applicant. 

The amendment approved on Monday expands the number of people who qualify as social equity applicants to include people who were convicted of cannabis-related crimes and to the family members of people convicted of cannabis-related crimes. 

This provision mirrors a cannabis equity program in New York that was recently highlighted in Politico for having the unintended consequence of excluding women from obtaining cannabis licenses. Men were convicted of cannabis-related crimes at higher rates than women, which has contributed to a disproportionate number of men in New York obtaining cannabis licenses from the equity program.

The amendment also establishes cannabis “mezzobusinesses,” which permits a license holder to grow and manufacture large amounts and operate up to three retail locations.