The Minnesota Office of Cannabis Management (OCM) has agreed to a settlement with a group of social equity marijuana business license applicants who were granted entry into a canceled license preapproval lottery, an attorney representing the OCM announced in a Ramsey County District Court hearing Friday morning.
The agreement likely puts to rest litigation that threatened to throw a wrench in the OCM’s plans to award hundreds of licenses in a series of lotteries set to begin Thursday.
The group had asked the court to force the OCM to reinstate the drawing, which was abandoned in November after a handful of applicants sued the office, alleging they were unfairly denied entry. Ramsey County Judge Stephen L. Smith last month ordered the OCM to stage the lottery, arguing the office had a legal obligation to do so. Smith is expected to dismiss that order in the coming days.
The pre-license lottery was designed to give social equity applicants — which include veterans, residents of high-poverty areas and people negatively affected by cannabis prohibition — a head start in the new industry.
Under the agreement, the OCM will prioritize applicants who were approved for the canceled lottery throughout the licensing process, according to a statement from Minneapolis-based cannabis consulting firm Blunt Strategies, which organized the group of successful applicants that filed the litigation. Applicants selected in a license lottery must secure “labor peace agreements” with unions, undergo background checks, ensure they’re in compliance with local zoning ordinances and pass a pre-opening inspection by the OCM before they can open for business.
“This is an important win for equity, fairness, and the integrity of Minnesota’s cannabis licensing system,” Leili Fatehi, Blunt Strategies partner and president of the group of successful applicants, said in a statement. “This outcome was made possible by the business owners who stepped up, organized, and fought for what they were promised.”
The settlement will allow applicants seeking license types that are capped in number by law who are not selected in an upcoming lottery to carry over their applications into the next round of licensing. The state will also partially reimburse the legal expenses for the group of applicants that brought the case, according to Blunt Strategies.
“We look forward to holding license application lotteries on June 5 for social equity and general applicants as we continue to launch Minnesota’s adult-use cannabis marketplace,” OCM spokesman Josh Collins said in a statement. “OCM remains committed to getting licenses out the door, establishing the cannabis supply chain, and delivering the social equity benefits Minnesota’s adult-use cannabis law promised.”
