Minnesota lawmakers have finalized a marijuana legalization bill in conference committee, reaching an agreement on tax and appropriations provisions in the last of three meetings to resolve differences between cannabis reform measures that passed the House and Senate last month. The final bill will now head to floor votes in both chambers this week and, if approved there, to the governor’s desk to be signed into law.
Bicameral negotiators appointed to the conference committee had already tackled the bulk of the legislation in their previous two meetings, adopting agreed-upon articles that also dealt with major issues like local control and possession limits. Now the panel has produced a final product after accepting provisions on the tax rate for cannabis and appropriating revenue.
Negotiators agreed to tax cannabis sales at the rate of 10 percent, in line with provisions approved by the Senate. The House had voted to apply an eight percent tax on sales that would later be adjusted every two years so that revenues equalled, or did not significantly exceed, the costs of implementing legalization incurred by various agencies.
Under the bicameral deal, 80 percent of revenue will go into state coffers and 20 percent will be directed to local governments to help cover their expenses related to legalization implementation.
At Tuesday’s meeting, members also approved amendments to provide for cannabis taxation agreements between the state and Indian tribes, detail appropriations to various state agencies to fund their roles in implementing legalization—including new support for the Office of Traffic Safety’s efforts on drug recognition training for police—and allow low-potency hemp products to be displayed in locked cases in stores instead of having to be behind the counter. Another amendment was accepted to make technical changes to tax provisions.
The committee rejected an amendment that sought to include provisions on how revenue distributed to localities could be spent.
The reason for the conference committee was that both the House- and Senate-passed cannabis legalization bills were separately amended over the course of a weeks-long committee process, so they needed to be unified before receiving final votes.
The next step is for non-partisan legislative staff to process the revised bill before it goes back to the House and Senate for final votes, after which point it will be sent to the governor. Rep. Zack Stephenson (D) said processing the bill “could take a bit” given its length and complexity, but he affirmed that lawmakers would enact the reform “before the end of the session.”
After that, our nonpartisan staff will process all the changes we’ve made, and put together a final bill for a final vote in the House and Senate. Because the bill is so long, and so complicated, this could take a bit. But!!!! We WILL get the bill done before the end of session!
— Zack Stephenson (@zackstephenson) May 15, 2023
“This has been a huge team effort through the legislature and through the state of Minnesota,” Port said at Tuesday’s meeting. “Hopefully, we will have a final conference committee report for you within the next day or two, and then Representative Stephenson and I remain absolutely committed to getting this bill passed this year.”
Stephenson told Port that “it’s been such a wonderful thing to work with you on this bill,” adding that he “cannot imagine having worked on with anybody else.”
“We’re over 30 committee hearings between the two of us, and that’s not including the three conference committee meetings that we’ve had,” he said, recognizing “the work that has been done by you, by the Senate conferees, by the House conferees, by many members who are not in this room, by many members who have retired from the legislature, by people who never served in the legislature, by people who have never been to the Capitol, to get this bill to this place.”
The House is expected to adjourn for the year on Thursday, leaving little time to complete the final steps to enact the legislation.
Gov. Tim Walz (D), who released an biennial budget request in January that included proposed funding to implement marijuana legalization and expungements, has already pledged to sign the legislation when he receives it.
With majorities in both the House and Senate and control over the governorship this session, Democratic-Farmer-Labor party officials have been expressing confidence that legalization will be enacted this year.
The legislation that advanced through both chambers is an iteration of the 2021 House-passed bill from former Majority Leader Ryan Winkler (D), who now serves as campaign chairman of the advocacy coalition MN is Ready.
The governor has called on supporters to join lawmakers and the administration in their push legalize marijuana this session, and he circulated an email blast in January that encourages people to sign a petition backing the reform.
Adults 21 and older could purchase and possess in public up to two ounces of cannabis and they would be allowed to cultivate up to eight plants at home, four of which could be mature.
People could possess up to two pounds of marijuana at home.
Gifting up to two ounces of marijuana without remuneration between adults would be permitted.
Prior marijuana records would also be automatically expunged. The Bureau of Criminal Apprehension would be responsible for identifying people who are eligible for relief and process the expungements.
In addition to creating a system of licensed cannabis businesses, municipalities and counties could own and operate government dispensaries.
On-site consumption permits could be approved for events, and cannabis delivery services would be permitted under the bill.
Local governments would not be allowed to prohibit marijuana businesses from operating in their areas, though they could set “reasonable” regulations on the time of operation and location while also limiting the number of cannabis business licenses based on population size.
There would be a gross receipts tax on cannabis sales in the amount of 10 percent, which will be applied in addition to the state’s standard 6.875 percent sales tax.
Eighty percent of revenue would go into the state’s general fund—with some monies earmarked for grants to help cannabis businesses, fund substance misuse treatment efforts and other programs—and 20 percent would go to local governments.
A new Office of Cannabis Management would be established, and it would be responsible for regulating the market and issuing cannabis business licenses. There would be a designated Division of Social Equity.
The legislation would promote social equity, in part by ensuring diverse licensing by scoring equity applicants higher. People living in low-income neighborhoods and military veterans who lost honorable status due to a cannabis-related offense would be considered social equity applicants eligible for priority licensing. People convicted of cannabis offenses, or who have an immediate family member with such a conviction, would also qualify.
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The House bill was vetted by numerous committees before reaching the floor. It passed the Ways and Means Committee, Taxes Committee, Transportation Finance and Policy Committee, Economic Development Finance and Policy Committee, Public Safety Finance and Policy Committee, Health Finance and Policy Committee, Education Finance Committee, Human Services Policy Committee, Workforce Development Finance and Policy Committee, Agriculture Finance and Policy Committee, State and Local Government Finance and Policy Committee, Labor and Industry Finance and Policy Committee, Environment and Natural Resources Finance and Policy Committee, Judiciary Finance and Civil Law Committee and Commerce Finance and Policy Committee (twice).
The Senate committees that have signed off on the bill are the Finance Committee, Taxes Committee, Rules and Administration Committee, State and Local Government and Veterans Committee, Labor Committee, Human Services Committee, Health and Human Services Committee, Transportation Committee, Environment, Climate, and Legacy Committee, Agriculture, Broadband, and Rural Development Committee, Jobs and Economic Development Committee, Commerce and Consumer Protection Committee and Judiciary and Public Safety Committee (twice).
Following their election win in November, Democrats internally agreed to discuss the issue imminently.
A poll released last week found that 64 percent of Minnesota registered voters support creating a regulated marijuana market, including 81 percent of Democrats and a 49 percent plurality of Republicans.
Two polls released in September found that the majority of Minnesota residents support adult-use marijuana legalization—and one survey showed that even more Minnesotans approve of the state’s move to legalize THC-infused edibles that was enacted last year.
A survey conducted by officials with the House at the annual State Fair that was released in September also found majority support for legalization. That legislature-run poll found that 61 percent of Minnesotans back legalizing cannabis for adult use.
Meanwhile in Minnesota, the House separately passed an omnibus health bill last month that contains provisions to create a psychedelics task force meant to prepare the state for possible legalization.
The large-scale Senate legislation was amended in the House earlier this month to include language from a standalone psychedelics measure sponsored by Rep. Andy Smith (D). The proposal is expected to move to a bicameral conference committee, where members will reconcile differences between the House and Senate proposals.
Photo courtesy of Philip Steffan.