Minnesota Department of Health Releases Early Rules for Dispensary Applicants

The Minnesota Department of Health has now
opened the state application process for the highly competitive market where
only 2 licenses to manufacture and sell cannabis will be initially legal under
state law.

The market is an odd anomaly this
year.  Legislators in state approved the
first and only “smokeless” market in the country for medical users. This is in
and of itself controversial, precisely because most medical users claim that
smoked cannabis has the fastest efficacy. 
However, for the time being, the practice is still illegal in the state.

Applicants for the manufacturing facilities
must complete an arguably arduous application process.  The application itself is 36 pages.  Applicants must submit 20 copies of their
response, a $20,000 application fee and a detailed business plan by October 3.

The two licensed manufacturers who are
picked by the state will in turn commit to opening at least one dispensary each
by the middle of 2015 and three by 2016. 

In a market where edibles entrepreneurs, in
particular, have such a clear advantage over what is widely described as “the
other half” of the vertical, competition for entry will still be very
high.  While the state as of now is only
allowing two manufacturers to operate legally, it is unclear if this number
will be increased in the near future.

However, given the massive shortages seen
in Washington State for cannabis when a tightly controlled new pipeline failed
to deliver enough product (although in that case to recreational users), it is
more than likely that the state will begin to authorize both more manufacturers
and dispensary outlets as reform rolls on not just in Minnesota, but across the
country this year.