On April 7, 2025, the Minnesota Office of Cannabis Management (OCM) received final approval from an administrative law judge (ALJ) for its comprehensive adult-use cannabis regulations. The finalized rules, which take effect later in April, bring Minnesota one step closer to launching a regulated adult-use market. Simultaneously, a recent court order has cleared the way for the long-delayed Social Equity Lottery, which had been on hold since November 2024.
Minnesota’s Cannabis Rules Finalized
The final rules establish the framework for operations, packaging, labeling, testing, advertising, and other compliance standards for licensed cannabis businesses in Minnesota. These rules were developed following extensive public comment and stakeholder input and reflect a major milestone in the rollout of Minnesota’s adult-use cannabis program.
While the ALJ had previously identified a procedural defect in the rulemaking process, the majority of the rules were allowed to proceed. With the judge’s April 7 approval, the rules will become effective later this month, enabling the OCM to implement key licensing and compliance processes.
Social Equity Lottery Reinstated by Court Order
The Social Equity Lottery — designed to give individuals from communities disproportionately impacted by cannabis prohibition a first opportunity to secure cannabis licenses — was originally scheduled to launch in late 2024. However, it was stayed by court order, pending resolution of legal challenges involving eligibility disputes.
That stay has now been lifted.
On April 4, 2025, the Ramsey County District Court issued an order granting a writ of mandamus in favor of a nonprofit group of preapproved applicants. The court held that Minnesota law requires OCM to conduct a lottery when there are more qualified applicants than licenses available. The ruling emphasized that:
- OCM’s failure to proceed was contrary to legislative intent,
- The 648 pre-approved social equity applicants had no adequate legal remedy,
- And delaying the lottery harmed the ability of equity applicants to enter the market on a fair footing.
As a result, OCM must conduct the lottery in an “impartial, random” format as prescribed by statute.
What This Means for Businesses
With rules finalized and the Social Equity Lottery back on track, the state is poised to take meaningful steps toward market launch in 2025. Key takeaways for clients:
- License Prep: Businesses should begin preparing for compliance under the new rules, which become effective later this month.
- Equity Focus: The court’s decision reaffirms the central role of social equity in Minnesota’s cannabis licensing framework.
- Timeline Updates: The Social Equity Lottery is expected to proceed ahead of the general licensing round, tentatively slated for May or June 2025.
