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With Democrats in control of both the Minnesota House and Senate, there will likely be a push for across-the-board legalization of recreational cannabis. (AP file photo)

New Legislature increases chances for legal cannabis

When the 93rd session of the Minnesota Legislature opens on Jan. 3, along with the usual business of budgets and taxes will be a newcomer to the spotlight: the legalization of recreational cannabis.

A watered-down legal cannabis law took effect over the summer, allowing the sale of some food and drink products with small but intoxicating levels of hemp-derived THC, the psychoactive ingredient in marijuana.

But with Democrats now in control of both the Minnesota House and Senate, there will likely be a push for across-the-board legalization of recreational cannabis — and it could well succeed.

“I would give it a very good chance,” said Paul Fling, an attorney with Fox Rothschild in Minneapolis. “Gov. [Tim] Walz has already said that it’s a top priority for his administration to get legal cannabis passed. [DFL Speaker Melissa] Hortman has signaled that she strongly supports legalization.”

Minneapolis attorney Jason Tarasek, who works extensively on cannabis-based legal issues, was even more emphatic.

“The roadblocks are gone,” he said. “I think it might have surprised some members of the Legislature that the previous legalization went through and that they took both the House and Senate. I don’t know if there’s a clear leader in the Senate on this issue right now, but that might be a matter of time.”

Recreational cannabis has been made legal in 21 states, most recently — just this month — in Missouri and Maryland. The DFL House passed a legalization bill last year, but it never got past the GOP-controlled Senate.

“We’re not the first state to do this, so there are some guidelines in place,” said Tarasek. “Colorado is probably the best model. We won’t have to create laws from scratch the way they did 10 years ago.”

Regulatory complications might even be more meaningful than any obstacles to legalization. Minnesota has no manufacturing regulations in place for production of THC products such as edibles. Once products contain chemicals derived from cannabis, they’re no longer considered food, so companies don’t have to have the license otherwise required to sell food and beverages in the state and aren’t subject to inspections.

But when it comes to regulating recreational marijuana itself, Minnesota is in new territory. Unlike many other states, it has no special licensing requirements for someone to sell THC products, so some cities are passing their own licensing ordinances.

“The regulatory piece should follow whatever the legislation looks like,” said Fling’s Fox Rothschild colleague J.T. Schuweiler. “And part of that will be answering questions like, What are the goals in legalizing? Is it to eliminate the black market? Probably that, and to generate tax revenue.”

Any legalization law will likely need to contain provisions for licensing and taxing the sale of recreational cannabis — and that will probably make it harder to tamp down the black market.

“The price of legal recreational cannabis is not competitive with the black market,” said Schuweiler. “You saw this in California, where the high regulatory requirements and tax rates caused the cost of complying to be passed to the consumer.

“People who use cannabis, many of them have an established relationship with their dealer. It’s just easier to go to that person than to go to a dispensary.”

“The regulations for adult use of marijuana will be extensive,” agreed Tarasek. “It will be about protecting consumers and ensuring that minors can’t get their hands on marijuana.”

Then there are the normal obstacles that any bill faces. There are steps to getting it introduced in the House and the Senate, committees have to be assembled, those committees have to provide reports, and amendments will have to be dealt with before it goes to committee to determine its final makeup — all that before it reaches the governor’s desk.

“It still could be some time before it’s legalized,” said Fling.

While nobody can predict the contents of a theoretical legalization bill, Tarasek said he’s hoping that it contains a social equity component to offset the damage done by the Reagan-era war on drugs, which led to arrests and incarcerations that have disproportionally affected communities of color.

“The bill passed by the DFL last year takes strides in that direction,” he said. “It gives communities of color an advantage in the license application process, and increased access to financing.

“Getting into the marijuana industry is capital intensive. Restricting it to rich white guys would defeat the purpose of legalization.”

RELATED: Legal questions persist as THC products spread in Minnesota

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