In May 2023, Minnesota Governor Tim Walz signed House File 100 into law, legalizing the recreational use of marijuana in the state. The law went into effect on Aug. 1, 2023, making it legal for Minnesotans to use, possess and grow marijuana in the state. The state is about three months away from allowing retailers to sell and purchase recreational marijuana.
Experts expect the medical marijuana industry to be negatively affected if transitions in other states are anything to go by. Data from the Cannabis Regulatory Agency in Michigan shows that in August 2024, medical-marijuana sales totaled about $1.2 million, a significantly small figure, especially when compared to recreational sales, which hit $294 million.
Currently, more than 48,000 individuals in the state buy marijuana, thanks to Minnesota’s medical program, which started enrolling people in 2015.
The state legalized medical marijuana in May 2014 when then Governor Mark Dayton signed into law a legislation that legalized its use for several medical conditions, including HIV, Tourette’s syndrome, epilepsy and Crohn’s disease. There are two licensed retailers in the state, namely Green Goods and RISE, which operate 15 dispensary locations between them. These locations don’t seem to be enough, as patients often must drive long distances just to get to a dispensary.
Chelsea Swanson, a St. Francis patient, reveals that she must drive almost 30 miles just to get a dispensary. Swanson, who was skeptical of marijuana before she started using it to manage her pain and nausea, hopes that the launch of recreational dispensaries will eliminate the need to travel that far to access the drug. She adds that with the opening of these stores, she won’t have to enroll in any regulatory program. However, she continues, access to top-quality products makes the trip worth it, revealing that she has since stopped using prescription medications to manage her symptoms.
State officials plan to circumvent any impact to the medical-cannabis industry by imposing a tax on recreational products, while medical products remain tax free. Limits on potency and possession will also be imposed on recreational products. This is in addition to eliminating the $200 enrolment fee that patients pay annually for the medical marijuana program.
Officials will also make patient recertification a once-every-three-years thing instead of an annual affair, while also reducing the age limit for registered caregivers to buy marijuana flower to 18 from 21. Further, patients in medical programs in other states will also be allowed to purchase products in the state under a visiting patient option.
As established entities such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) have seen in the markets where they operate, sales of medical marijuana tend to drop as adult-use sales are launched, so the entities operating in Minnesota should expect similar adjustments in consumer patterns.
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