📜 Buying and Selling Your Minnesota Cannabis License...

There seems to be a lot of confusion going on with the Minnesota cannabis business application being up for sale, transferring, etc. Hopefully, this article will help break that down. Sources are noted. We highly recommend consulting a lawyer for the paperwork and transfer. We have licenses available for sale now in every category. Please reach out to Carp.

Minnesota’s adult-use cannabis laws have specific provisions regarding the transfer and sale of cannabis business licenses, including those designated for Social Equity Applicants (SEA). Here’s a summary of the rules for both SEA license holders and non-SEA license holders, based on current statutes and application guidance: 

What are the rules in Minnesota Cannabis about buying and selling your SEA license? Also, what are the rules for non-SEA license holders?

Rules for Social Equity Applicant (SEA) License Holders 

• License Transfer Restrictions for SEA Licenses 

• First Three Years: For the first three years after a license is issued to a social equity applicant, the license may only be transferred to another qualified social equity applicant. This restriction is intended to ensure that the benefits of the social equity program remain with the intended communities. 

• After Three Years: After three years, the license may be transferred to any entity, not just another social equity applicant. However, such transfers are still subject to prior written approval by the Office of Cannabis Management (OCM). 

• Review Process: Any transfer of a license that was issued as a social equity license must be reviewed by the Division of Social Equity and is subject to prior written approval of the OCM[1]. 

• Ownership and Control 

• True Party of Interest: A person identified as a true party of interest (generally, someone with more than 10% ownership or control) may not be affiliated with more than one application per license type. If a true party of interest is involved in multiple applications within the same license type, all associated applications will be disqualified[2]. 

• Verification Requirement: Applicants for social equity status must provide verification representing no less than 65% ownership of the business[2]. 

Rules for Non-SEA License Holders 

• License Transferability 

• General Rule: Licenses issued to non-social equity applicants may be freely transferred, subject to prior written approval by the OCM, unless the license holder has not received a final site inspection or is a social equity applicant[1]. 

• Annual Renewal: All licenses must be renewed annually, and license holders may petition the OCM to adjust the tier of their license if they meet all applicable requirements[1]. 

• Ownership and Control 

• True Party of Interest: The same restrictions on true party of interest apply to non-SEA applicants as to SEA applicants. No person may be affiliated with more than one application per license type unless specifically allowed (such as a cultivator and manufacturer, or wholesaler and transporter)[2]. 

• Prohibited Transfers 

• License Preapproval: License preapprovals cannot be transferred[1]. 

• Change in Business Structure: A new license is required if the legal business structure changes (e.g., conversion, dissolution, consolidation, reorganization, bankruptcy, merger, or assignment of assets)[1]. 

Summary Table 

License Type	First 3 Years After Issuance	After 3 Years	Transfer Process
SEA License	Only to another SEA	To any entity	OCM & Social Equity Division review and approval required
Non-SEA License	Freely transferable*	Freely transferable*	OCM approval required

*Subject to certain conditions (e.g., final site inspection, not a social equity applicant). 

Additional Notes 

• Application Denial: The OCM may deny an application if the applicant does not meet the qualifications, fails to provide required information, or if the application contains materially false statements[2]. 

• Reconsideration: Applicants may request reconsideration if their application is denied, but must do so within 10 calendar days of the denial[2]. 

• License Limits: Restrictions on the number or type of license a business may hold apply to every cooperative member or every director, manager, and general partner of a cannabis business[1][2]. 

Key Takeaways 

• SEA licenses cannot be sold or transferred to non-SEA entities for the first three years. 

• After three years, SEA licenses may be transferred to any qualified entity, with OCM approval. 

• Non-SEA licenses are generally more freely transferable, but still require OCM approval and are subject to certain restrictions. 

• True party of interest rules apply to all applicants and limit involvement in multiple applications per license type. 

These rules are designed to ensure that social equity goals are met while maintaining the integrity and security of Minnesota’s cannabis market[1][2]. 

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 Article References:

1. General Licensing / Office of Cannabis Management

2. OCM-Cannabis-Overview-Application.pdf