Harmonizing Medical, Adult-use and Hemp THC in MN

May 28, 2026

A comprehensive summary of Minnesota's 2026 Omnibus Cannabis Bill

Every year the legislative session provides a chance to fix problems for Minnesota’s newest legal industry, or put new obstacles in its way, and the exact contours of those problems and solutions are fluid for months until, at the eleventh hour, the Minnesota Legislature passes a cannabis bill. Or does not! This year, once again, they got a 2026 Omnibus Cannabis Bill done, mere hours before adjournment. My personal thanks to Rep. Jess Hanson (D) (a true leader in this complex area), Will Blauvelt of SotaCANN, Rep. Nolan West (R) (the only Republican to vote for cannabis), and the many others who worked hard to shape the bill and carry it across the finish line.

First, the big change:

Integrating Medical and Adult-Use Supply Chains

The legislature approved a complicated compromise that integrates the medical and adult use supply chains, hopefully while improving – not just protecting – patient access. It also includes a ramp to allow micro businesses to apply to grow into mezzo businesses, a perquisite, which is only available if you participate in the medical market as well as the adult use market, and also includes a little spiff for social equity.

Functionally, here’s how it works:

Effective January 1, 2027, the med-combo license becomes a “macro” license, which can grow 38,000 square feet of flowering canopy (“38K”) indoors or 1 acre outdoors. (That’s a lot less than the 60K that was on the table for a while, or the 90K that Vireo asked for.) Macros can also operate up to 8 retail locations, but all above 5 must be in high medical need areas. The number of macros is also limited, with a maximum of eight until 1-1-2030. Macros have certain requirements to serve the medical, as well as the adult-use market.

Existing licensees are incentivized to serve the medical market in a couple of new ways. First, they can expand their canopy under cultivation or number of retail locations, as follows:

License Type	Regular Canopy (Indoor / Outdoor)	Bonus Canopy if also Medical (Indoor / Outdoor)	Regular # of Retail Locations in License	Bonus Retail Locations if also Medical and in a “high medical needs area”
Micro	5K / ½ acre	+ 1K / ¼ acre	1	+ 1
Mezzo	15K / 1 acre	+ 3K / ½ acre	3	+ 2
Cultivator	30K / 2 acres	+6K / 1 acre	-	-
Retail	-	-	5	+ 3

Finally, licensees will now have the opportunity to move up a classification: micro to mezzo, and mezzo to macro. Before applying, the licensee must have been part of the medical program for two years (i.e., no one can do this for two years). And, as a nod to social equity licensees, who have been complaining that the restrictions placed on social equity licensees make them inferior to regular licenses, one-half of the businesses reclassifying up will be social equity licenses. That may mean that the number of regular businesses allowed to scale up will be dictated by how social equity licenses apply and qualify.

What does it mean to participate in the medical market, which I have shortened to “also Medical” in the table above? For retail locations, a license would have the medical cannabis retail endorsement from OCM. Importantly, this includes the retail location employing or contracting with either a pharmacist or a medical cannabis consultant who has completed required training. (Side note: Minnesota just approved three training programs for medical cannabis consultants, a new profession in Minnesota!)

For cultivation, it means that at least one-quarter of the flower grown is sold to a business with a medical cannabis endorsement. There are also provisions to ensure that certain products needed by medical patients are produced.

Note from Jen: It’s not in the bill itself, but for patients, importantly, buying in the medical market means that they do not either state sales tax or the 15% cannabis tax. That’s a huge savings, and there are other reasons to register in Minnesota’s medical program, as well. Hopefully this bill both incentivizes and allows smaller players to join the medical cannabis industry.

I asked Maren Schroeder of Blunt Strategies, a longtime patient advocate and a member of the Cannabis Advisory Council, what she thought of the bill. She said, “The unification compromise was fair, and skillfully done. Patients will now have more options than adult use consumers, instead of fewer. Minnesota is one of the few states that has seen growth in its medical cannabis program since adult use cannabis legalization, and that is a testament to the work done in prior years by patients to secure the strongest patient protections in the country. As we continue to move Minnesota away from the most regulated access program in the country, I expect to see discussions around sunsetting or substantially modifying the patient registry system in favor of patient identification cards, taxation of some medical cannabis products, and improving the patient experience while maintaining integrity and research opportunities.”

Lightning Round – What Else Changed?

Are you preliminarily qualified and worried about the fact that you only have 18 months to open from when you received preliminary approval (“the 18-month clock”)? Good news! All licensees can get a 6-month initial extension from OCM “upon request”, and possibly a second 6-month extension if they have made good faith attempts to move forward. This reflects how much more slowly this industry is opening that the industry and the 2023 Legislature hoped, and this additional time is much appreciated from aspiring licensees.

Are you still a qualified applicant (i.e., have not done background checks and started the 18-month clock)? Better get on that – qualified applicant status now expires after 6 months or on ___

Do you need to pay a licensed transporter to get product to testing? Under the new bill, cannabis businesses may self-transport to the testing lab, as long as they meet requirements for secure transport and submit info to OCM about their vehicle and proof of insurance.

Are you fighting with your city? This bill shifts the balance slightly towards license applicants and against resistant cities, providing that OCM must not issue a license if a local unit of government submits evidence of a business’ lack of compliance – but, allowing OCM to issue that license if a local unit of government fails to respond, whether through negligence or on purpose to sink an application.

Do you want to grow both indoors and outdoors? Sadly, the legislation further clarifies that cultivation may be either indoor or outdoor. I believe that cultivators will still be able to fully switch from one to the other with the changing seasons, which was OCM’s position before this statutory change. But some people had hoped to change this to “and” (while remaining under canopy limits), and this is a big fat no from the Legislature.

Do you want to change your corporate structure (e.g. from LLC to corporation)? Under current law that would have cancelled your license, but no longer! This fix was a priority of SotaCANN and they got it.

Do you want to throw a licensed Cannabis Event? The Event Organizer license got a much-needed rewrite, effective January 1, 2027. To throw a licensed event (allowing retail sales of adult-use products, not in a retail store), one will now need to get the license and then apply for a temporary event permit for each event. That’s much cleaner than describing each event within the license application.

Are you wondering whether OCM cares about unlicensed cannabis shops? They do. OCM has powers to inspect any commercial premises where cannabis is being sold, manufactured, or cultivated without a license. The 2026 bill also provides that the OCM must not issue a cannabis license to any person or business who was assessed a fine by OCM under 342.09 subdiv 6, which is for sales of cannabis products without a license.

Endorsements Galore:

OCM took this year as an opportunity to clean up the statute to reflect a complex system of endorsements which allow licensees to conduct certain activities. This system both codifies emerging practice and expands it in some areas. For example, a new Internal Transporter Endorsement allows a micro or mezzo to transport products between its locations without using a third-party transporter, and requires the same proof of insurance and compliant vehicle that OCM has been requiring, but there will be a new process. A cannabis flower packaging endorsement allows retailers to package flower at the point of sale, that is, to do “deli style”, which currently can be done under a guidance memo.

These changes to the statute are not effective until January 1, 2027, so licensees should be alert for more info, such as in a future newsletter and from OCM, laying out the available endorsements and how they can obtained.

Moving from the hemp THC market into the adult-use market:

This bill also “builds a genuine regulatory integration framework that allows compliant hemp operators to expand into licensed cannabis operations,” as Steven Brown wrote in an excellent blog.

Brown recently renamed his company, from Nothing but Hemp to Nothing but Canna, reflecting its move towards the adult-use cannabis industry. He is one of many carving this path, in light of the looming federal ban, and a coalition helped develop Minnesota law to make that transition possible for Minnesota’s hemp operators.

Side Note: The Hemp THC Ban

In case you’re new here, Minnesota’s hemp THC is the best regulated, intoxicating hemp THC market in the country, with talented entrepreneurs who have made a lot of money selling safe, consumable products to people 21+ across the country.

Last November, Mitch McConnell, and friends succeeded in ““closing the intoxicating hemp loophole ““ and killing a $28 billion (with a B) dollar industry by making most hemp-based THC drinks and edibles become fully federal illegal on November 12, 2026. There are ongoing efforts by advocates to pass another provision to delay or rework this ban, but none have so far looked more likely than not to succeed. It is a constant topic in my newsletter - follow along here.

One of the given rationales for the hemp ban is that, around the country generally, there are all of these sketchy products at gas stations with 200 mg of God-knows-what, and then of course children get them, and nobody wants that. That’s why Minnesota has fully regulated these products since 2023: requiring labeling, packaging, and testing requirements that guarantee to consumers that these products will have consistent effects, have trusted ingredients, and are sold only to people who are 21+, with IDs checked at every point of sale. In Minnesota that has meant that these compliant, low-dose beverages – 5 mg and 10 mg – are now on the menus of many of the Twin Cities restaurants and bars, in a separate section. I can have a 10 mg margarita from Trail Magic while my date has one with tequila, and that’s now normal in Minnesota. They’re also sold at every liquor store in a separate section, and some liquor stores have really differentiated themselves by having deep and interesting THC sections, like Top 10 Liquors. I was recently on a panel with Jon Halper, the owner of Top 10 Liquors, at the Minnesota Craft Brewers Association. He expressed his hope that cannabis would be rescheduled to Schedule III this summer [which did not come to pass - that federal announcement rescheduled only medical cannabis and adult-use is on a bit of a longer path- again, subscribe to my newsletter for updates. The federal ban would mean that hemp - so innocuous! Risk-equivalent to alcohol- suddenly becomes treated as Schedule I cannabis in the eyes of the federal government and thus other parties: federal licenses that alcohol distributors and breweries need, insurers, 280E taxes - at which point it is no longer worth it to dabble in hemp and one must cross the line into adult-use cannabis or be done with it.

In Minnesota, however, we have licensed hemp THC since 2023, and under Minnesota law, low-potency hemp edibles (LPHE) retailers, manufacturers, and wholesalers are licensed and will remain licensed. The category could have an inside-Minnesota life - just as our adult-use industry does. All inputs from Minnesota, only sold within Minnesota. Federalism takes from us but also allows us to be an island of sanity in the federal storm.

So, since we do not know whether this federal ban will happen or not, and we do not know if federal rescheduling will happen or not, the Minnesota Legislature has approved a sort of on-ramp for the hemp THC industry to move even further towards, and into, the adult use cannabis industry.

Before the 2026 Omnibus Bill, Minnesota law did not allow any overlapping ownership between cannabis and hemp. That provision is deleted by the 2026 bill. Cannabis and hemp businesses can also occupy the same premises – important if businesses are sharing valuable manufacturing equipment! – but only if “(1) the businesses have the same majority owners in common; and (2) the majority owners in common each individually own more than ten percent in each of the businesses.” Finally, cannabis businesses can manufacture, as well as sell, lower-potency hemp edibles as well as adult-use cannabis products.

Another important area of synthesis: a new category called ratio hemp-infused cannabis products. These are products sold in adult-use cannabis retail locations (dispensaries) and they can include large amounts of the non-intoxicating cannabinoids that frequently appear in Minnesota’s low-potency hemp edible market: CBD, CBC, CBG, and CBN – up to 100 mg of each and 400 mg total. Consumers have learned to appreciate the “entourage effect” of these minor cannabinoids along with THC in the low-potency market, and this law change explicitly approves bringing hemp-derived versions of the minor cannabinoids into the adult-use market in a way that is not true in many states. I’m excited to see these products appear.

In the low-potency market, there is also a new natural hemp concentrate pathway designed for broad-spectrum or full-spectrum extracts. And finally, a new “large format” option: a 750 ml bottle containing 17 servings of 5 mg each! This allows hemp beverage companies to create bottles to compete with wine and tonics.

Most of these changes are effective January 1, 2027, so hemp licensees should plan their approach carefully and seek expert advice to chart a path forward.

Also of note in LPHE Land:

• Labeling changes, again. One good piece: we can use QR codes again for some disclosure! See the part of the bill changing Minn. Stat. 342.62.

• An LPHE Retailer can get an on-site consumption endorsement even if it does not hold an on-sale liquor license; it would need to submit proof of liability insurance to OCM. Furthermore, this provision is effective immediately after enactment. Whoever can’t get a liquor license but wants to serve hemp THC this summer, you got this through the Legislature!

What didn’t pass:

Here are some of the measures that did not pass, but had been discussed this session, for those following along:

• A proposed ban on disposable vapes.

• Any changes to the social equity limitations (65%/35% cap table rules, true party in interest (TPOI), hold for 3 years), except for a provision that allows an investor to hold up to 33% interest in up to four social equity licenses (vs. the normal 10% limit).

• Disclosure that a cannabis product was remediated (though this could arguably still be done by OCM rulemaking)

• Decreasing the sample size of cannabis flower and of concentrates required to send to testing (this could be done by OCM, but so far they have pushed back)

How to Contact Me

Have more questions?

Contact me for personalized consultations about how Minnesota law and regulation apply to your business. I love to help operators find a compliant path forward through the maze of changing federal and state requirements. And I pride myself on being easy for entrepreneurs to access expert advice, and return to building than most lawyers can be.

You can set up a free 15-minute exploratory call here, or go ahead and book a paid meeting with me at a time that works for you here.

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Disclaimer: The opinions expressed above, and any mistakes, are my own. While it is really long, this article is still not a comprehensive overview and does not constitute legal or business advice. Cannabis law changes frequently and has both federal and state aspects. Also remember to check effective dates to understand how changing laws affect you. Seeking personalized advice is recommended.