How To Open A Dispensary In Minnesota (2025)

Overview

Wondering how to open a dispensary in Minnesota? 

This article will guide you through the entire process, including the key legal requirements, Minnesota dispensary license information, and strategic planning steps to ensure your business complies with Minnesota’s cannabis laws. Whether you’re starting a dispensary for medical or recreational use, this guide will provide the details you need.

Is Weed Legal in Minnesota?

Yes. Minnesota became the 23rd state to legalize recreational marijuana when Governor Tim Walz signed the bill into law on May 30, 2023. Adults aged 21 and older can legally possess and use cannabis as of August 1, 2023. The law also includes provisions for expunging low-level cannabis convictions and outlines the framework for regulated sales.

While adult use is legal, recreational dispensaries will not open until Minnesota’s licensing system is fully established—expected sometime in early 2025.

Can Anyone Sell Cannabis Right Now?

Until the state licensing system is launched, only Minnesota’s 11 tribal nations can operate dispensaries independently. Notably, the Red Lake Nation opened NativeCare, the state’s first recreational dispensary, offering cannabis to adults 21 and older.

What’s the Latest on Cannabis Licensing?

Minnesota’s cannabis licensing process continues to evolve as the state prepares for commercial sales:

• January 17, 2024: The Office of Cannabis Management (OCM) proposed key changes to simplify the licensing process and pave the way for at least 381 retail stores. Recommendations included removing certain application requirements and issuing temporary licenses to help social equity applicants get to market faster. These proposals require legislative approval.
• July 24 – August 12, 2024: Verified social equity applicants were allowed to apply for license preapproval through the OCM. Later, on October 16, around 300 applicants received deficiency notices requesting additional information. No final decisions have been made yet.
• November 18–19, 2024: The state denied 1,169 out of 1,800 preapproval applications, citing missing documents, ownership issues, or attempts to manipulate the process. A lawsuit prompted a Ramsey County judge to pause the license lottery originally scheduled for November 27, delaying the rollout into 2025.
• February 18 – March 14, 2025: Eighteen months after legalization, Minnesota began accepting its first round of adult-use cannabis business applications. Capped-license applicants (retailers, cultivators, manufacturers, and mezzobusinesses) will be entered into lotteries in May and June.
• April 14, 2025: Minnesota officially adopted its final adult-use cannabis rules after review and approval by an administrative law judge. These rules clear the way for the state to begin issuing licenses—starting with social equity applicants—under the new regulatory framework.
• May 5, 2025: The OCM announced it will hold license application lotteries on June 5 for key adult-use cannabis business licenses. One lottery will be for social equity and general applicants for cultivator, manufacturer, and mezzobusiness licenses. A separate lottery will be held for retailers, with a second retailer lottery scheduled for July.
• May 23, 2025: Minnesota Governor Tim Walz signed SF 2370 into law, updating cannabis regulations ahead of the adult-use market launch. The bill introduces a lower-potency hemp wholesaler license, simplifies labeling rules, allows out-of-state medical cannabis patients to be served, and expands social equity eligibility to include individuals with past cannabis convictions.
• June 5, 2025: The OCM awarded 249 pre-approval business licenses for cultivators, manufacturers, retailers, and other roles. Licenses were prioritized for verified social equity applicants under the early launch program. 
• June 18, 2025: the OCM announced it had issued the state’s first adult-use cannabis business license. The license went to a social-equity qualified cultivation microbusiness. The OCM also announced that on August 1st it will open new application windows for cannabis testing laboratory licenses (unlimited supply) and for “event organizer” licenses. 
• July 22, 2025: Minnesota’s Office of Cannabis Management (OCM) held its second adult-use cannabis retail license lottery, drawing 75 winning applicants from a pool of 569 candidates. This lottery included both general applicants and social equity applicants who hadn’t been selected in the first lottery last month. The 75 selected businesses are not automatically licensed; they must still pass background checks and fulfill all regulatory requirements before receiving final retail licenses.

The Opportunity Size

Numbers from a Denver-based Marijuana Policy Group project that cannabis sales in Minnesota would reach $426 million in year one of adult-use cannabis legalization and would grow to $1.2 billion by year five. 

Additionally, it is estimated that legalization will have a significant impact on the state’s projected tax revenue. The group projected $112 million in tax revenue in the first year and $300 million by the fifth year. Legalization will reportedly generate an annual economic impact of $2.6 billion and 20,000 jobs. 

Local Cannabis Restrictions & Laws

Following the legalization of adult-use cannabis in Minnesota, local governments were allowed to impose temporary moratoriums through January 1, 2025. As of that date, all such bans have expired, and cities can no longer prohibit cannabis businesses outright. However, municipalities still have authority to implement reasonable restrictions related to zoning, location, and business density. For example, cities like Mankato, Ramsey, and East Grand Forks have adopted regulations that limit where dispensaries can open, often using buffer zones around schools, parks, and other sensitive areas.

In addition to zoning, many cities have introduced rules around public consumption and business hours. While cannabis use is allowed in private residences under state law, local ordinances may prohibit use in public parks or downtown areas. Cities such as Roseville and St. Louis Park have updated their municipal codes to reflect these policies. The OCM continues to provide guidance and resources to help local governments align with state law while addressing community concerns.

Medical Marijuana Program Opportunities

On May 29, 2014, Minnesota became the 22nd state to legalize medical marijuana when Gov. Mark Dayton signed the Minnesota Medical Cannabis Act (SF2470) into law. This established one of the nation’s most restrictive medical marijuana programs.

The use of medical cannabis in Minnesota is limited to patients who are Minnesota residents, who have been diagnosed with one of the qualifying diseases, and who have been certified as such. Cancer, HIV/AIDS, and Alzheimer’s disease are among the conditions that qualify. Sickle cell illness and chronic motor disorder will be eligible for the program starting in August 2021. You can see the comprehensive list of qualifying conditions by visiting the Division of Medical Cannabis’s website. On May 25, 2021, Governor Walz signed HF2128, allowing registered medical cannabis patients 21 and older to purchase raw/flower cannabis for the first time under Minnesota’s medical program.

As of  May 8, 2025, the Minnesota Medical Cannabis Patient Registry, managed by the Office of Medical Cannabis, reports 52,937 active patients with approved enrollment.

Medical Marijuana License Types and Fees

Medical Cannabis Manufacturer 

A licensed manufacturer is allowed to cultivate, produce, and distribute medical cannabis. There are two medical cannabis manufacturers registered with the Minnesota Department of Health. Currently, no new manufacturer license applications are being accepted.

The application fee costs $20,000 and the annual license fee is estimated to be in the region of $75,000 to $100,000.

Medical Cannabis Laboratory

According to state law, medicinal cannabis must be tested for content, contaminants, and consistency by third-party laboratories that have been approved by the state’s commissioner. Applications for laboratory licenses are currently open.

To thoroughly evaluate applying laboratories, the testing process is divided into three parts:

• The application and required documentation must be submitted.
• Laboratories that match the criteria will be notified for a site visit.
• Approval is received from the Department of Health.

Visit Medical Cannabis Laboratory Application Process and Forms for additional information.

Recreational Use/Adult Use Legalization 

Minnesota’s path to legalizing recreational marijuana reflects growing public and political support. Approval rose from 56% in 2019 to 58% in 2021, according to state polls. On May 13, 2021, the House passed HF600, which would have allowed adults 21+ to possess 1.5 ounces and grow up to eight plants, but the bill stalled in the Senate.

In 2022, efforts to revise HF600 continued, with a focus on licensing and public safety. Governor Tim Walz backed legalization in his budget proposal, and a milestone was reached on July 1, when Minnesota legalized THC edibles and beverages (up to 5mg per serving) under HF 3595. Later that year, the MN is Ready campaign launched to push reform forward.

Momentum carried into 2023. Governor Walz supported HF 100, a broader legalization bill, and included implementation funding in his January budget proposal. The Senate companion bill, SF 73, advanced by April, and on April 28, the Senate passed HF 100 with amendments for public safety and substance use treatment.

Here are the key provisions outlined in the final marijuana legalization bill HF100:

• Starting from August 1, 2023, individuals who are 21 years old or above are legally permitted to purchase and carry up to two ounces of cannabis in public. 
• The bill would also allow individuals to cultivate a maximum of eight plants at home, with four of them being mature plants. Moreover, individuals would be able to possess up to two pounds of marijuana within their residences. 
• Another noteworthy aspect of the bill is the allowance of gifting up to two ounces of marijuana between adults without any monetary exchange. 
• Furthermore, the bill proposes the establishment of licensed cannabis businesses, with the provision that municipalities and counties could also own and operate government dispensaries. 
• Additionally, the bill permits on-site consumption permits for events and allows for the operation of cannabis delivery services.

Minnesota Cannabis License Application

The Minnesota Office of Cannabis Management (OCM) accepted cannabis business license applications from February 18th, 2025 until March 14th, 2025. During this cycle, OCM accepted applications from both verified social equity applicants and general license applicants. Available license types include microbusiness, mezzobusiness, cultivator, manufacturer, retailer, wholesaler, transporter, testing facility, delivery service, and medical cannabis combination business.

Licensing Key Dates:

January 15, 2025 – Social Equity Applicant Verification Opens

January 30, 2025 – Social Equity Applicant Verification Closes

February 18, 2025 – License Application Window Opens (for SEA & All Applicants)

March 14, 2025 – License Application Window Closes

June 5, 2025 – Application Lotteries 

July 2025 – Second Retailer Lottery (Tentative)

General Cannabis Business Licensing

The OCM is advancing its efforts to establish a structured and transparent cannabis licensing process for cannabis businesses. This initiative includes a two-step approach: an application process followed by a lottery for licenses that have a cap on availability.

Step 1: Application Process

Prospective cannabis business operators must first submit an application through OCM’s online system. The submission requires the completion of all necessary worksheets, along with payment of the designated application fee for the license type being pursued. To be considered for the lottery, applicants must meet all eligibility criteria established by OCM. 

Step 2: Cannabis Business License Lottery

Following the application phase, OCM will conduct a lottery to determine which applicants will proceed in the licensing process. 

Once the lottery is completed, applicants will be notified of their selection status. Those chosen will have the opportunity to move forward in the licensing process. The exact date of the lottery will be announced at a later time.

Minnesota Cannabis License (General)

Minnesota Cannabis License Types and Fees

Minnesota Cannabis License Availability

The total number of general cannabis business licenses available for applicants during the February 18 to March 14 licensing period is as follows:

Social Equity Cannabis Business Licensing 

The Social Equity initiative aims to foster a fair and inclusive cannabis industry by providing prioritization in the licensing process, designated licenses per type, and access to resources including grants for technical assistance, financial capital, and workforce training. 

The OCM has established a structured approach for applicants seeking a cannabis business license under social equity provisions. This process includes three key steps: 

Step 1: Social Equity Eligibility Verification

Before applying for a cannabis business license, social equity applicants must complete a verification process to confirm their eligibility. This verification is free and administered by OCM. The most recent verification period closed on January 30, 2025. Applicants verified during the initial cycle remain eligible and do not need to submit additional documentation. Those who were not verified in the initial cycle will have another opportunity when the verification window reopens.

Step 2: Cannabis Business License Application

Once verified, applicants must submit their business license application through OCM’s online system. This process requires completing all required worksheets, paying the applicable licensing fee, and meeting the necessary criteria for eligibility in the license lottery. 

If an application contains errors or missing details, applicants may receive a request for more information. They will have 14 calendar days to address any issues and resubmit their application. While OCM will provide guidance on how to correct errors, it remains the applicant’s responsibility to ensure their application is accurate, complete, and submitted within the deadline.

Step 3: Cannabis Business License Lottery

For licenses that have a cap on availability, OCM will conduct a lottery to determine which applicants will advance in the licensing process. Once the lottery concludes, OCM will notify each applicant about their selection status. Those chosen will proceed to the next steps in obtaining their cannabis business license. The exact date of the lottery will be announced at a later time.

Minnesota Cannabis License (Social Equity)

Social Equity License Types and Availability

The total number of social equity cannabis business licenses available for applicants during the February 18 to March 14 licensing period is as follows:

Minnesota Cannabis License Requirements

Applicants must meet the following criteria:

• Verification of Social Equity Status: At least 65% ownership must be by individuals verified as social equity applicants.
• Complete Application: Must include all required information and documentation.
• Application Fee: Must be paid by the deadline.
• Single Application Per License Type: Applicants may only submit one application per license type.

For more details, visit mn.gov/ocm.

Guide for Qualified Applicants: Steps to Obtain a Dispensary License in Minnesota

This guide, as provided by the OCM, outlines the process that qualified applicants must follow after being chosen through a license lottery (for capped licenses) or meeting the minimum application criteria (for uncapped licenses) to obtain full licensure and legally operate a cannabis dispensary in Minnesota.

Step 1: Obtain Preliminary Application Approval

Before advancing in the licensing process, applicants must first receive preliminary application approval from the Minnesota Office of Cannabis Management (OCM). This requires:

• Completing a third-party background check through an accredited screening agency.
• Signing a Labor Peace Agreement (LPA) with a certified labor organization.

While preliminary approval does not permit business operations, it enables applicants to move forward in securing a physical location and fulfilling licensing requirements.

Step 2: Secure a Business Location and Submit Updated Application Documents

Applicants granted preliminary approval have 18 months to meet additional requirements, which include:

• Finding a compliant business location that aligns with state and local zoning regulations.
• Submitting finalized application documents, including business plans, security protocols, inventory management procedures, and compliance strategies.
• Engaging with local government officials to ensure the chosen site meets zoning laws and retail registration requirements.

Early discussions with local authorities help prevent delays and potential location conflicts.

Step 3: Obtain Local Zoning Compliance Certification

All cannabis dispensaries in Minnesota must receive local zoning approval before moving forward. The process involves:

• Submitting business location details and relevant documents to the local government.
• Allowing 30 days for local authorities to review and confirm compliance.
• Addressing zoning-related issues if the proposed location does not meet regulatory standards.

Since some municipalities impose restrictions on the number of dispensaries allowed, applicants should verify local zoning regulations before finalizing a location.

Step 4: Pass a State-Mandated Site Inspection

Following zoning approval, the Minnesota OCM conducts a site inspection to verify that:

• The dispensary adheres to state and local cannabis regulations.
• Security systems, inventory tracking, and operational procedures are correctly implemented.
• The business is fully prepared for lawful cannabis sales.

If deficiencies are found, the applicant must address them before obtaining a license.

Step 5: Pay Licensing Fees and Receive the Dispensary License

After successfully passing the inspection, applicants must pay the required licensing fee to receive official approval. Once the fee is submitted, the OCM issues the official dispensary license, allowing the business to operate—except for retail sales, which require an additional step.

Step 6: Obtain Local Retail Registration (If Required)

Before selling cannabis, dispensaries may need a local retail registration from the city or county where they operate. The registration process varies by location and may involve:

• A lottery system.
• A first-come, first-served process.
• A fixed limit based on population size (e.g., one dispensary per 12,500 residents).

Since zoning certification does not guarantee retail registration, applicants should confirm local requirements before securing a business location.

How To Open A Dispensary In Minnesota: Key Considerations

With the evolving regulatory environment in mind, particularly for those considering opening a dispensary in Minnesota, it’s crucial to navigate this journey with a strategic approach. We at Cannaspire are here to guide you through this process, focusing on key areas essential for your success. Each of these pivotal aspects is supported by our in-depth expert resources and services, designed to streamline your entry and growth in the cannabis market.

• Comprehensive Understanding of Minnesota Cannabis Laws
  • It’s advisable to thoroughly understand and keep up-to-date with Minnesota’s cannabis regulations, focusing on the differences between medical and recreational marijuana laws.
• Strategic Business Planning
  • We recommend developing a detailed business plan. Our Cannabis Business Plans service can provide you with the necessary tools and guidance.
• Careful Navigation of the Licensing Process
  • Familiarize yourself with the dispensary license Minnesota requirements to ensure compliance and successful application. Make sure you fully understand the dispensary license requirements in Minnesota. Our Cannabis Licensing Services can guide you through the entire application process.
• Securing Adequate Funding
  • Accurately estimating startup costs is vital. Explore our Cannabis Business Consulting Call service for personalized advice.
• Choosing an Optimal Location
  • Ensure compliance with local zoning laws. Our team can assist with location scouting and compliance checks.

Network Design and Implementation for the Dispensary

• Create a compliant and customer-focused network infrastructure. Our Cannabis IT Solutions offer network design and implementation services that adhere to regulatory standards, ensuring secure and efficient operations. 

• Implementation of Security Measures
  • Install state-mandated security systems. We offer comprehensive Cannabis Security Plans and products.
• Effective Staff Recruitment and Training
  • Hiring knowledgeable staff is key. Consider our Education and Training Services for staff development.
• Inventory Management
  • Selecting the right products is crucial. We can guide you in establishing supplier relationships and inventory selection.
• Marketing and Community Outreach
  • Develop a strong brand and online presence. Our Marketing, Branding & Creative Services can help you stand out.
• Planning for the Dispensary Launch
  • A soft opening can provide valuable feedback. We can assist in planning your launch strategy.
• Ongoing Operations and Regulatory Compliance
  • Regular compliance checks are essential. Our Cannabis Compliance services ensure you stay on track.

Common Pitfalls & Mistakes to Avoid When Opening a Dispensary

When opening a dispensary in Minnesota, many entrepreneurs make avoidable mistakes that delay their license approval, increase startup costs, or lead to compliance issues. Here are some common pitfalls and how to avoid them:

Incomplete or Incorrect License Application

Mistake: Many applicants fail to submit all required documents or make errors in their paperwork. Missing details can result in application rejection or delays.

Solution:

• Double-check all licensing requirements from the Minnesota Office of Cannabis Management (OCM).
• Prepare your business plan, security plan, funding details, and compliance documentation in advance.
• Hire a consultant or legal expert to review your application.

Underestimating Startup & Operational Costs

Mistake: Many dispensary owners fail to properly budget for real estate, inventory, security, licensing fees, and taxes. They run out of capital before becoming profitable.

Solution:

• Explore financing options such as small business loans or cannabis-specific lenders to help cover startup expenses.
• Work with regulatory experts or consultants to better understand compliance requirements and avoid unexpected costs.
• Invest in staff training and operational planning early on to improve efficiency and reduce long-term expenses.

Choosing the Wrong Location

Mistake: Some dispensaries fail because they ignore zoning laws or pick a location with low foot traffic and visibility.

Solution:

• Ensure your store complies with Minnesota’s zoning regulations (e.g., cannot be within 1,000 feet of schools).
• Pick a high-traffic area near complementary businesses.
• Work with a cannabis real estate expert to secure a compliant location.

Ignoring Compliance & Security Requirements

Mistake: Minnesota has strict security and compliance laws, including seed-to-sale tracking (Metrc), surveillance cameras, and inventory tracking. Many businesses fail inspections due to incomplete security measures.

Solution:

• Familiarize yourself with state regulations early in the planning process, including Metrc reporting, surveillance standards, and storage requirements.
• Develop a comprehensive security plan that covers camera placement, access control, alarm systems, and secure product storage.
• Conduct internal audits and mock inspections to identify and resolve gaps before state regulators conduct official reviews.
• Consider hiring compliance professionals or security consultants to ensure your systems meet all state requirements.

Poor Marketing & Advertising Strategy

Mistake: Cannabis branding and marketing are heavily regulated, and many dispensaries get their accounts banned on platforms like Facebook & Google for violating ad policies.

Solution:

• Focus on SEO, local search (Google My Business), and content marketing instead of paid ads.
• Use email marketing and SMS to engage customers.
• Partner with cannabis-friendly platforms like Weedmaps or Leafly.

Hiring Untrained Staff

Mistake: Some dispensary owners hire employees without proper cannabis training, leading to bad customer experiences and compliance violations.

Solution:

• Require budtender certification or training in product knowledge & compliance.
• Offer ongoing education and training on customer service, compliance, and sales strategies.

Not Having a Strong Business Plan

Mistake: Some businesses fail because they don’t have a clear roadmap for profitability, funding, and operations.

Solution:

• Create a detailed business plan.

Frequently Asked Questions (FAQ)

Q: How much does it cost to open a dispensary in Minnesota?

A: The cost includes a $2,500 application fee, a $2,500 initial license fee, and a $5,000 renewal fee. Startup costs can vary, but you should budget for licensing fees, real estate, security systems, inventory, employee wages, and compliance requirements.

Q: Is weed legal in Minnesota?

A: Yes. Recreational marijuana became legal in Minnesota on August 1, 2023, for adults 21 and over. Medical marijuana has been legal in the state since 2014.

Q: When was marijuana legalized in Minnesota?

A: Governor Tim Walz signed the adult-use cannabis legalization bill into law on May 30, 2023, making Minnesota the 23rd state to legalize recreational use.

Q: What are the steps to open a dispensary in Minnesota?

A: To open a dispensary, you’ll need to apply through the Office of Cannabis Management (OCM), meet eligibility requirements, pass a background check, secure a compliant location, and obtain zoning and licensing approvals.

Q: What license do I need to open a dispensary in Minnesota?

A: You’ll need a Cannabis Retailer License. The licensing process may involve participating in a cannabis license lottery and meeting specific qualifications such as social equity criteria.

Q: What is the Minnesota cannabis license lottery?

A: The lottery is used to distribute limited licenses fairly. Eligible applicants who meet submission requirements are entered into randomized drawings for capped licenses like retailers and cultivators.

Q: What are Minnesota’s cannabis laws?

A: Minnesota law allows adults 21+ to possess, use, and grow cannabis in limited amounts. The law also includes provisions for licensing businesses, product safety, advertising restrictions, and local zoning rules.

Q: Does the social equity program affect dispensary licenses in Minnesota?

A: Yes. The state prioritizes applicants who qualify under social equity criteria, offering additional support and dedicated license allocations to ensure fair industry access.

Q: How much does it cost to open a dispensary in Minnesota?

A: Startup costs can vary, but you should budget for licensing fees, real estate, security systems, inventory, employee wages, and compliance requirements. Many businesses require several hundred thousand dollars to get fully operational.

Ready to Start Your Dispensary in Minnesota? Let Us Guide You!

Opening a dispensary in Minnesota can be a challenging journey, but with the right guidance, success is within reach. Our team is here to help you navigate every step—from preparing your application to ensuring full regulatory compliance. With our expertise, you’ll have the support needed to build a strong foundation for your business in Minnesota’s cannabis market. Check here to explore our Minnesota-specific services and get in touch with us today to turn your vision into reality.

Stay Informed: Join Our Minnesota Cannabis Mailing List

As the state’s cannabis program, particularly the recreational program, grows in scope, we will keep you informed about all relevant cannabis news and legislation pertaining to opening a dispensary in Minnesota. You can stay up to date with the latest cannabis news, licensing deadlines, and legalization updates by signing up for our Minnesota Cannabis Mailing List (see below).

This includes, but is not limited to, the following:

• How much does it cost to open a dispensary in Minnesota?
• What are the requirements to get a marijuana business license and open a dispensary in Minnesota?
• What special programs will be available?
• And more

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