BIOMASS Processing in Minnesota Micro/Mezzobusiness Biomass Limits and Third-Party Processing

The amount of biomass you need depends on your specific business model, product mix, and whether you're selling raw flowers or finished products. Here's a comprehensive breakdown based on Minnesota's OCM laws and industry standards.

Biomass Manufacturing Limits

A Minnesota cannabis mezzobusiness has the following biomass manufacturing limits:

Manufacturing Capacity: 30,000 pounds of cannabis products annually

This limit is established by statute and is calculated as equivalent to the amount of cannabis flower that can be harvested from a facility with a plant canopy of 15,000 square feet in one year. The Office of Cannabis Management determines the exact conversion methodology between canopy square footage and biomass output to establish this annual manufacturing limit.​

For comparison, a microbusiness (the smaller vertically integrated license) is limited to manufacturing approximately 10,000 pounds of cannabis products annually (equivalent to harvest from 5,000 square feet of canopy).​

Cultivation Limits Supporting Manufacturing

The mezzobusiness cultivation limits that feed into this manufacturing capacity are:​

• Indoor cultivation: Up to 15,000 square feet of plant canopy

• Outdoor cultivation: Up to 1 acre of mature, flowering plants (expandable to 3 acres if the Office of Cannabis Management determines expansion is consistent with state goals)

Third-Party Processing and Co-Manufacturing Arrangements

Based on Minnesota's cannabis regulations, here's what the research reveals about working with third parties for processing and product creation:

• Purchasing Biomass from Other Licensees: A mezzobusiness can legally purchase cannabis flower, cannabis concentrates, and other cannabis materials from other licensed businesses, including microbusinesses, other mezzobusinesses, cultivators, manufacturers, and wholesalers to use in their own manufacturing operations. This allows a mezzobusiness to supplement their cultivation with purchased biomass up to their 30,000-pound annual manufacturing limit.​

• Exclusive Use Requirements: Minnesota regulations require that cannabis manufacturing must take place on equipment that is used exclusively for the manufacture of cannabis products. This means manufacturing equipment cannot be shared for toll processing or contract manufacturing for other licensees.​

• Licensee Restrictions: A mezzobusiness license holder cannot own or operate any other cannabis business and cannot hold multiple mezzobusiness licenses. Additionally, the statute states that "no person, cooperative, or business holding a cannabis mezzobusiness license may own or operate any other cannabis business or hemp business or hold more than one cannabis mezzobusiness license."​

• Practical Implication: While Minnesota law does not explicitly prohibit toll processing arrangements between separate licensees, the exclusive-use requirements for manufacturing equipment and facilities, combined with the restriction that a mezzobusiness cannot hold multiple licenses or own other cannabis businesses, suggests that traditional toll processing (where one facility processes materials for another licensee on a contract basis) would face regulatory challenges. Each mezzobusiness would need to conduct manufacturing only according to its approved manufacturing plan and only on equipment dedicated to its own operations.​

• Recommendation: If you're considering co-manufacturing arrangements or processing biomass for other third parties as a mezzobusiness, it's advisable to contact the Minnesota Office of Cannabis Management directly at cannabis.info@state.mn.us to confirm whether such arrangements are permissible and what additional licensing or operational modifications might be required.

Understanding Cultivation Yields

To determine how much biomass you need, you must first understand yield per square foot, which is the industry standard metric:​

Industry Average Yield:

• Conservative estimate: 39.5 grams per square foot annually​

• Optimized indoor operations: 50-75 grams per square foot​

• High-performing operations: Up to 60 grams per square foot or more​

For a mezzobusiness with 15,000 square feet of indoor canopy:​

• Conservative yield: 15,000 sq ft × 39.5 g/sq ft = 592,500 grams ≈ 1,305 pounds of dried flower annually

• Optimized yield: 15,000 sq ft × 60 g/sq ft = 900,000 grams ≈ 1,980 pounds of dried flower annually

For a microbusiness with 5,000 square feet of indoor canopy:​

• Conservative yield: 5,000 sq ft × 39.5 g/sq ft = 197,500 grams ≈ 435 pounds of dried flower annually

• Optimized yield: 5,000 sq ft × 60 g/sq ft = 300,000 grams ≈ 660 pounds of dried flower annually

Accounting for Processing Losses

Your cultivation yield represents dried flowers. However, when you process flower into finished cannabis products, you lose significant biomass due to:

Flower-to-Product Conversion Rates:​

• Dry flower trimming loss: You lose approximately 20-30% of weight during trimming and processing as stems and excess leaf material is removed​

• Extraction yield (for concentrates/distillates): Only 10-20% of the starting material becomes the finished concentrate​

• Edible manufacturing: Approximately 1-2 ounces of trim per edible serving, depending on potency

Example for Mezzobusiness:If you produce 1,305 pounds of dried flower and want to maximize your 30,000-pound manufacturing limit:

• Approximate usable flower after trimming: 1,305 lbs × 70-80% = 915-1,044 pounds of trimmed flower

• This means you need to purchase additional biomass from other licensees to reach your 30,000-pound manufacturing capacity​

How Much Biomass to Acquire

For a Mezzobusiness Targeting Full Manufacturing Capacity (30,000 lbs annually):​

You need to acquire approximately 2,000-2,500 pounds of flower input to produce 30,000 pounds of finished products, accounting for different product types:

• If producing primarily finished flower and trim: ~1,500-2,000 lbs of flower produces ~30,000 lbs when including all product categories (flower, trim, small packages, etc.)

• If producing high-yield products like edibles and beverages: Lower flower inputs needed due to volume multiplication through infusion

Practical Strategy:

1. Cultivate at maximum capacity (15,000 sq ft canopy) to produce 1,300-2,000 lbs of dried flower annually

2. Purchase supplemental biomass from other licensees (microbusinesses, other mezzobusinesses, cultivators, or wholesalers) to fill the gap to 30,000-pound manufacturing limit​

3. Allocate flower strategically across your product mix (retail flower, concentrates, edibles, trim)

For a Microbusiness Targeting Full Manufacturing Capacity (10,000 lbs annually):​

A microbusiness with 5,000 square feet should produce approximately 435-660 pounds of dried flower annually. To reach the ~10,000-pound manufacturing limit, you would need to:

1. Maximize your cultivation to produce 435-660 pounds of dried flower

2. Purchase 400-800 pounds of additional flower from other licensed businesses to supplement

3. Focus on high-margin products (edibles, concentrates) that multiply flower weight into higher finished product volumes

Key Planning Considerations

• Vertical Integration Advantage: The mezzobusiness and microbusiness licenses allow you to combine cultivation and manufacturing under one license, which means:

  • You can purchase flower, concentrates, and other materials from other licensees to supplement your cultivation​

  • Your manufacturing limit (30,000 lbs for mezzo, 10,000 lbs for micro) applies to total cannabis products manufactured, not just flower

• Sourcing Flexibility: You can source biomass from:​

  • Your own cultivation (15,000 sq ft for mezzo; 5,000 sq ft for micro)

  • Other microbusinesses

  • Other mezzobusinesses

  • Cannabis manufacturers

  • Cannabis wholesalers

  • Licensed hemp growers (for hemp products)

• Financial Planning Tip: When creating your business plan, calculate your expected yield per square foot conservatively (use 40-50 g/sq ft rather than optimistic 60+ g/sq ft) and plan to purchase 30-50% of your manufacturing inputs from other licensees rather than relying entirely on cultivatio