OCM Turns Away Most Applicants: The Good, The Bad, and The Future
This week's issue includes: a breakdown of why OCM rejected over 1,000 cannabis pre-approval applications and what the future may hold for those who deserve a second chance
The Pre-Roll curates the most important cannabis news and developments at the intersection of policy, politics, and industry development. With over 3,100 subscribers, the Pre-Roll is Minnesota’s premier source for cannabis-related information and intelligence.
The Pre-Roll is written by Blunt Strategies, Minnesota’s first and only full-service strategic consultancy cultivated exclusively for the cannabis industry.
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Top 5 Must Reads (or Watch)
Minnesota's Office of Cannabis Management (OCM) has rejected about 1,150 of the 1,817 applications submitted for social equity license pre-approval. OCM attributed the rejections to various issues, including incomplete documentation, violations of ownership and “true party of interest” requirements, and attempts to manipulate the system by submitting multiple or fraudulent applications. Interim Director Charlene Briner explained that the application process serves as a proxy for readiness to operate in a highly regulated market. Attorneys for rejected applicants have criticized the OCM for inadequate communication about the reasons for rejections, which cannot be appealed under state law. Applicants whose applications have not yet been rejected will receive final confirmation about whether their application will proceed to the lottery, expected to take place the week of December 2, which will allocate 280 pre-approval. Applicants receiving pre-approval via the lottery will not yet receive an operational license but, rather, the guarantee of an operational license upon submitting final plans and securing necessary local government approvals. For cultivators, pre-approval may also allow early planting to ensure readiness for market openings in the spring. [Read more: MinnPost]
Lawsuits should be expected as some lawyers representing applicants argue some of the rejections were based on minor errors or inconsistencies. [Read more: MPR News]
Exclusive Insights You Won’t Find Anywhere Else: Earlier this fall, the Office of Cannabis Management (OCM) issued deficiency notices to some license pre-approval applicants, granting them 5-15 days to address specific issues. Yet, many applicants rejected for technical errors reported never receiving such notices, raising a critical question: under what circumstances did OCM decide to issue deficiency notices, and when did it choose not to? OCM’s explanation, as forwarded to us by a rejected applicant, and our analysis of what it reveals about OCM’s next steps and the potential viability of lawsuits or other challenges are available in the premium section.
As first reported in last week’s Pre-Roll, the Minnesota Office of Cannabis Management (OCM) has taken legal action against Zaza Cannabis Dispensary, marking the agency’s first lawsuit against a cannabis retailer. The lawsuit, filed in Hennepin and Ramsey County courts, accuses Zaza of selling products with THC levels over 70 times the state’s legal limit and attempting to conceal non-compliant items during inspections. Inspectors documented incidents where Zaza employees reportedly smuggled products out through back doors in backpacks to evade seizure. The OCM seeks a court order for the destruction of the illegal products, which have a retail value of approximately $20,200, and for Zaza to cover all related costs, including court and destruction expenses. The case underscores the OCM’s commitment to enforcing compliance in Minnesota’s regulated cannabis market. [Read more: Star Tribune]
The Office of Cannabis Management hosted a virtual listening session on the state’s CanRenew and CanGrant programs last Friday, November 15. CanRenew will award grants to eligible organizations for investments in communities where long-term residents are eligible to be social equity applicants. CanGrow will award grants to eligible organizations to help farmers navigate the regulatory structure of the legal cannabis industry, and nonprofit corporations to fund loans to farmers for entry and expansion into the legal cannabis industry. [Watch recording: Minnesota Cannabis College]
A University of Minnesota health survey revealed a decline in high-risk drinking and a rise in cannabis use among students, reflecting a cultural shift. Students cited control, safety, and fewer hangovers as reasons for preferring cannabis over alcohol. [Read more: Minnesota Daily]
Upcoming Events
Firewall for Freedom hosted by the ACLU-MN with special guest Attorney General Keith Ellison. November 25, 2:30 PM via webinar.
American Cannabis Nurses Association Regional Meet Up. December 6, 6:30 - 9 PM in St. Paul.
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