Minnesota To Crack Down on Illegal Flower Sales, Including Full-Strength Hemp

Minnesota To Crack Down on Illegal Flower Sales, Including Full-Strength Hemp

Minnesota’s Office of Cannabis Management (OCM) announced Tuesday that it will begin to crack down on the illegal sales of cannabis flower across Minnesota as the state’s adult-use market takes form. The Star-Tribune reports that the OCM entered into an agreement with the Minnesota Department of Health (MDH) to add inspection capacity for illegal sales of cannabis flower.

Minnesota is the 23rd state in the nation to legalize adult-use cannabis for people 21 and older. In doing so, the state also legalized the sale of hemp-derived cannabinoid consumer products, a unique provision, but selling raw cannabis flower is currently illegal because OCM has not yet issued any cannabis business licenses, and hemp sellers must also be licensed. 

When Minnesota legalized adult-use cannabis, the Minnesota Legislature included statutory provisions, Minnesota Statutes, chapter 152.0264, making the sale of cannabis illegal until a business is licensed by OCM.

As seen in many other states, many retailers have taken advantage of the legal loopholes regarding hemp derivatives, but the state is pushing back against unlicensed businesses. Just a week ago, on March 7, the OCM issued an enforcement notice designed to warn retailers about selling full-strength hemp products. The OCM stated that it has received complaints of retailers selling full-strength cannabis flower under the guise of being hemp. Hemp is legal only within THC limits specified by state and federal law.

The OCM, in alignment with federal law regarding hemp under 7 CFR 990.1, will consider the total concentration of THC post-decarboxylation—the process that converts THCA to delta-9 THC to produce an intoxicating effect. The examination of raw flower products will include reviewing the certificate of analysis.

Minnesota Statutes, Chapter 342 defines Minnesota’s cannabis market, empowering the OCM to ensure compliance. Minnesota Statutes, chapter 342.09, subdivision 4 prohibits the retail sale of cannabis flower and cannabis products “without a license issued under this chapter that authorizes the sale.”

The OCM reiterated its stance on flower that is being sold by retailers without a license.

“Our primary goal at the Office of Cannabis Management is to ensure a safe, legal cannabis industry that protects public health and provides accurate, reliable information to adult consumers,” said Charlene Briner, OCM interim director. “This interagency agreement gives us capacity to conduct inspections during this transitional implementation period, and more fully integrates the work of the MDH inspectors who will eventually transition their work to OCM.”

MDH inspectors who inspect retailers selling legal hemp-derived cannabinoid products will begin simultaneous examination of w flower products being offered for sale to ensure those products are hemp and not cannabis.

“While this is a temporary issue that will no longer exist once businesses are licensed to sell cannabis flower, OCM’s commitment to ensuring an industry that abides by all legal requirements is steadfast and ongoing,” said Briner. “We are confident that by providing clear expectations and guidance to businesses, the majority of operators will choose to follow the law.”

The crackdown of raw flower products will mean that inspectors will look for the product’s certificate of analysis for test results on total THC. Per federal law and under the 2018 Farm Bill, hemp flower must contain 0.3% or less of delta-9 THC on a dry weight basis. Products exceeding 0.3% delta-9 THC in dry weight are considered marijuana and are therefore illegal to sell.

So what are the penalties involved for sellers of illegal flower? Retailers caught selling flower and who are in violation of the law could be faced with embargo of product and fines of up to $1 million for violating state law. Additionally, a violation could impact a person’s ability to receive a license for a cannabis business in the future. 

Per Minnesota Statutes, 342.09, subdivision 6, OCM may assess fines in excess of $1 million for violations of this law. Likewise, under Minnesota Statutes, chapter 342.19, OCM is empowered to embargo any product that it has “probable cause to believe . . . is being distributed in violation of this chapter or rules adopted under this chapter[.]”

The OCM encourages retailers to vet products that they are selling to ensure that the products are legal. The OCM has sent a letter to all retailers registered with MDH to alert them that inspections of raw flower will begin immediately.

In a December 2023 bulletin, Minnesota’s health department issued a similar warning, noting that the agency inspected 167 retailers offering hemp-derived cannabinoid products between August and November and found that more than one in three (39%) of the shops were selling illegal high-potency products. Under Minnesota law, hemp edibles and beverages sold in the state must not exceed 5 milligrams of THC per serving and no more than 50 milligrams per package.

Licensing for cannabis retailers is expected to roll out later this year, and state officials aim to launch cannabis sales in 2025.

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