Section 280E refers to a provision in the Internal Revenue Code (IRC) of the United States. 280E has significant implications for businesses involved in the sale of controlled substances, including marijuana (or “cannabis” under Minnesota law). The key points related to Section 280E are: Disallowance of Deductions: Section 280E prohibits cannabis retailers from taking deductions incurred in carrying on their trade or business. It applies to cocaine, heroin, and cannabis, among other Schedule I substances.  Impact on Marijuana Businesses: While most states have legalized cannabis for medi ..read more

Minnesota’s cannabis regulatory agency, the Office of Cannabis Management (also referred to in the law as the “Office”) will be in charge of drafting and issuing rules and regulations related to the industry. It is tasked with a variety of obligations, including:  To develop, maintain, and enforce an organized system of regulation for the cannabis industry and hemp consumer industry To prevent unauthorized access to cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products by individuals under 21 years of age To establish and regularly update stan ..read more

Ask most cannabis businesses what they would like to change about the industry and – aside from the 280E tax issue – many would say that they want better access to banking services. This is where the Secure and Fair Enforcement Regulation (SAFER) Banking Act, formerly known as the SAFE Banking Act of 2019, comes in. Did the SAFER Banking Act for cannabis pass? No, at least not yet. In September of 2023, the legislation was introduced to the U.S. Senate Committee on Banking, Housing, and Urban Affairs and hearings have since been held. But, at a time when bi-partisan legislation seems to be few ..read more

Minnesota’s cannabis law does a good job of making licenses available to a broad swath of entrepreneurs in the North Star State. Still, the application process is likely to result in significant expenses for applicants before they even know whether their cannabis business will qualify to receive a license from the state of Minnesota.  Among other things, applicants may have to be in a position where they have: Negotiated and signed a lease (and/or signed a letter of intent) Entered into a purchase agreement to buy a location Hired and paid an architect and/or designer to draft floor plan ..read more

As a brief aside from the business of cannabis, we thought it would be a good idea to educate those of you that are interested in growing your own cannabis. Minnesota’s personal use law is currently in force, so even though you may not be able to buy cannabis products yet, you can grow your own flower and make them yourself.  There are some restrictions in terms of what you can and cannot do when it comes to homegrown cannabis (and I am including hemp in the word “cannabis” for purposes of this post). The main statute concerning homegrown cannabis is Minn. Stat. § 342.09. It allows a per ..read more

As the cannabis industry develops in Minnesota and other jurisdictions, there is going to be a growing demand for banking services. The problem, however, is that federally chartered banks generally avoid working with cannabis businesses. The federal government has made efforts to open up banking services for the industry, including via the SAFE Banking Act that passed the House in 2019, but the Senate did not give it a vote. The SAFER Banking Act, however, is currently moving forward through various senate committees. Given the present state of Congress, it is unlikely that we will see the SAF ..read more

A cannabis mezzobusiness is given many of the same benefits given to a microbusiness licensee and has even more room to grow than a microbusiness, but one key exception is that mezzobusinesses are not permitted to obtain an on-site consumption endorsement. Authorized Actions: A mezzobusiness license allows the licensee to grow, produce concentrate, manufacture artificially derived cannabinoids, and producing other cannabis or hemp products. A mezzobusiness can also purchase plants, seeds, and flower, and sell cannabis and hemp products to other licensed businesses and directly to customers. S ..read more

One of the more unique approaches to licensing in Minnesota is the focus on helping small local businesses. The microbusiness license provides small businesses with flexibility not available to other licensees. Authorized Actions:  A cannabis microbusiness license allows the licensee to grow, produce concentrate, manufacture artificially derived cannabinoids, and producing other cannabis or hemp products. A microbusiness can also purchase plants, seeds, and flower, and sell cannabis and hemp products to other licensed businesses and directly to customers. On-Site Consumption: The microbu ..read more

Hemp licenses are somewhat different from cannabis licenses in the sense that a lower-potency hemp edible manufacturer may also own a lower-potency hemp edible retailer license. Moreover, a person could also hold an industrial hemp cultivation license. The vertical integration for lower-potency hemp edible licensees that are not available to cannabis licensees (other than micro- and mezzobusinesses), may help hemp licensees create efficiencies where cannabis licensees cannot.  Hemp Manufacturer Authorized Actions: A lower-potency hemp edible manufacturer license will permit the licensee ..read more

Section 280E refers to a provision in the Internal Revenue Code (IRC) of the United States. 280E has significant implications for businesses involved in the sale of controlled substances, including marijuana (or “cannabis” under Minnesota law). The key points related to Section 280E are: Disallowance of Deductions: Section 280E prohibits cannabis retailers from taking deductions incurred in carrying on their trade or business. It applies to cocaine, heroin, and cannabis, among other Schedule I substances.  Impact on Marijuana Businesses: While most states have legalized cannabis for medi ..read more