Negotiators settle on Minnesota marijuana taxes, possession limits

Published 9:03 am Tuesday, May 16, 2023

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By Brian Bakst

Lawmakers writing Minnesota’s marijuana legalization bill hope to complete that task as soon as Tuesday, which would set up decisive votes later in the week.

On Monday, the House-Senate panel made changes to accommodate local governments, to set the possession limit and to spell out a process to revisit criminal records for past marijuana offenses. They also firmed up a tax rate for the newly legal products.

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At this stage, it’s less about counting votes as it is about directing how — and how soon —Minnesota’s marijuana market gets off the ground.

“We are beginning decriminalization this summer. So penalties will be lowered or removed altogether for possession depending on amounts,” said Sen. Lindsey Port, DFL-Burnsville, the lead sponsor of the Senate’s marijuana bill. “Home grow will be available starting this summer. You’ll be able to begin to grow your own cannabis, if you choose.”

Other aspects will take more time.

Set-up of a regulated sales structure, license applications and the opening of dispensaries could take a year or more. And while the automatic process for clearing past low-level marijuana offenses from criminal records will start in August, it is likely to stretch well into 2024.

Drew Evans, superintendent of the Minnesota Bureau of Criminal Apprehension, said there are tens of thousands of records that need to be reviewed, and there could be a need for court orders to dictate what background checks conducted by entities in other states would show.

“We’ll be doing this as rapidly as we can, but we want to get it right,” Evans said. “So it has to be done right so that anybody that is entitled to relief receives that relief and vice versa.”

Changes made to the bill give the BCA flexibility instead of a hard deadline. Aside from the automatic sealing of petty misdemeanor and many misdemeanor offenses, there will be a petition process for people with more complicated records.

House and Senate negotiators have nailed down other elements.

They settled on an at-home possession limit of two pounds of flowered cannabis for adults 21 and up.

In an interview, Port said there is agreement to set the marijuana tax rate at 10 percent. Eighty percent of proceeds are expected to cover state costs of regulation while the remaining 20 percent will spill down to local governments.

Alex Hassel, a lobbyist for the League of Minnesota Cities, said much of the oversight will be at the local level, so it’s appropriate that there’s money, too.

“It’s going to bring some new costs to local governments, it’s going to exacerbate some existing costs,” she said. “The inspections, compliance are part of our regulatory responsibility to this bill. But there are also some of the other impacts that this bill will have in terms of traffic safety, nuisance and other law enforcement responsibilities that local governments have.”

The bill grants city and county officials power to cap the number of retail cannabis establishments. They could keep it to one license for every 12,500 people, but there is a caveat.

“Many municipalities will not choose to cap it or might choose to cap it much higher than that,” Port said. “We wanted to put a floor on it rather than a ceiling, because we really don’t know for sure what the market demand will be.”

Supporters and detractors alike say they’ll be watching the upcoming implementation as matters around traffic safety, public health and illicit sales start to shake out.

Republican Sen. Jordan Rasmusson, of Fergus Falls, is the only member of the House-Senate conference committee who didn’t vote for legalization earlier this session. He said that gives him a unique vantage point.

“Even if you support legalizing recreational cannabis, you have to make sure that you get it right,” Rasmusson said. “And so throughout the process, even though I’ve been an opponent of the bill, I’ve tried to offer common-sense amendments to prioritize Minnesotans public health and public safety if this bill does become law.”

He tried to align decriminalization aspects and the home-growing allowance with the start of retail sales. That was voted down.

The other Republican deeply involved, Rep. Nolan West of Blaine, joined Rasmusson in that vote.

“I think it’s better to line these dates up a little bit so that we don’t give an edge to the black market before the legal market has a chance to compete,” West said.

West was one of two Republicans to vote for the bill last month in the House.  None crossed over in the Senate. Port said she’s not sure if any will back the bill’s final passage.

“I’m still hopeful for Republican support at the end,” she said. “I think this is the thing Minnesotans have made very clear they are in support of. But I’m not counting on any of them.”