Minnesota Cannabis Startup Guide

Starting a cannabis company in Minnesota? We’ve put together a state-specific guide covering everything from available license types to fees, requirements, and what you should include in a Louisiana cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

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Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in Minnesota?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in Minnesota

Since Senate File 2470 passed in 2014, Minnesota adults can possess a 30-day supply of cannabis if they have a certification from a doctor. Patients are allowed to buy medical marijuana in liquid, capsule, vaporizable, or topical form. More than 31,000 patients have registered for medical marijuana use, and medical dispensary sales could be as high as $70 million in 2021. Dried leaves, marijuana plant, and infused edibles are illegal, as are home cultivation and recreational use.

Cannabis business license types

Minnesota issues licenses for two broad categories of cannabis businesses: vertically integrated manufacturers and laboratories.

Manufacturers: The state licenses these companies to grow, process, and package medical marijuana, then sell it at four dispensaries each. Note that Minnesota only offers two of these licenses, and both of them have already been granted, for a total of eight dispensaries. State rules for these companies are strict, covering everything from location to hiring and advertising.

Laboratories (aka testing labs): Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs use methods like liquid or gas chromatography to analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few.

Ancillary business: If you don’t want to grow, test, or sell cannabis in Louisiana, there are plenty of other ways to be part of the state’s cannabis industry. You can create a marijuana app, payment processing service, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!

Fees and other barriers to entry

Local governments may forbid cannabis companies or certain locations, so check city and county regulations.

Application fees: Applying for a cannabis business license in Minnesota costs $20,000.

License fees: It’s $146,000 each year for a cannabis business license in Minnesota..

Background check: You can’t employ anyone with a disqualifying felony conviction--a violation of controlled substance law--if you get a medical marijuana business license in Minnesota. All employees and staff have to get a criminal records check and get fingerprinted as well.

Do you need a cannabis business plan in Minnesota?

Yes, a business plan that’s 15 pages or less is required to get a medical marijuana business license in Minnesota. It has to include things like your expected production capacity, product offerings, pricing, and number of customers expected. And if you plan on raising funding from investors, you definitely need a business plan.

What to include in your business plan

Here’s what a marijuana business plan should include:
  • Product/service description: Will you run a dispensary, grower/processor, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which products will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll create oils or pills, how many dispensaries will you sell to? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).

  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?

  • Management team: Summarize your qualifications and those of others on your management team. (Think of it as a shorter, “greatest hits” version of your resume.) Obviously include cannabis industry experience, but it’s fine if you don’t have any. Highlight leadership skills, customer service, and business development experience in other industries.

  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of prices. You can also include a break-even analysis, showing which month you will be profitable.

  • Minnesota-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your security system, product tracking, secure product transport, waste plan, and anything else required.

  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.

How to research city regulations

Google your city or municipality name and “cannabis regulations” or “marijuana laws.” If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.

Helpful Links

Get expert help

Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:

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