Minnesota Marijuana Business

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What is the Demand for Marijuana in Minnesota?

In Minnesota, the Department of Health requires patients with qualifying medical conditions to enroll in the medical cannabis patient registry to qualify to purchase and possess medical cannabis legally. Qualifying patients must also be certified by a health care practitioner during the application process. Likewise, qualifying patients are required to be re-evaluated and re-certified by health care practitioners yearly. All these are put into consideration before patients are allowed to purchase medical cannabis. The Office of Medical Cannabis publishes periodic updates on medical cannabis in the state. The Medical Cannabis Program Update was published in January 2021. According to the report, as of December 31, 2020, 28,522 patients were actively enrolled in the patient registry. This is a 56% increase (n = 10,273) above the 18,249 who enrolled in the program as of December 31, 2019. However, the significant increase was primarily due to the Governor's emergency executive order 20-26. The executive order extended medical cannabis patient enrollments scheduled to expire from March 31, 2020, through 60 days after the end of the COVID-19 public health emergency.

Below is the active patient race and ethnicity breakdown as of December 31, 2020:

  • American Indians - 985 (3.4% of the registered patients)
  • Asian - 360 (1.3% of the registered patients)
  • Blacks - 1,704 (6.0% of the registered patients)
  • Hawaiian/Pacific Islander 66 (0.2% of the registered patients)
  • White - 24,724 (86.7% of the registered patients)
  • Hispanic - 917 (3.2% of the registered patients)
  • Unspecified races - 626 (2.2% of the registered patients)

There is no official report showing the sales data of medical cannabis in Minnesota.

How is Marijuana Taxed in Minnesota?

As of August 2021, marijuana is not subject to sales tax. The Minnesota Department of Revenue only charges Marijuana and Controlled Substance Tax on any illegal marijuana or controlled substance that is manufactured, sold, or in possession of a person. However, this is not a significant source of income for the state, so the funds generated are not allocated to different state needs, as is the case in other states. According to Minnesota Statutes, Chapter 297D, only persons who violate the Minnesota law on marijuana are obligated to purchase stamps from the Department of Revenue. The tax stamp must appear on the package of the illegal marijuana or controlled substance. The tax rate is $3.5 on each gram of marijuana. Payment can be made with cash (in person) or certified check or money order, but personal checks will not be accepted. Individuals pay this tax by completing Form MDT-1, Marijuana and Controlled Substance Tax Stamp Order. The completed form and payments may be mailed to:

Special Taxes Division

Mail Station 3331

Saint Paul, MN 55146-3331

(651) 556-3060

What is the Agency Taxing Marijuana Businesses in Minnesota?

In Minnesota, the state agency that manages the state's revenue system and administers state tax laws is the Department of Revenue. The Minnesota Department of Revenue handles the collection of state taxes, including taxes in relation to medical marijuana. The Department administers over 30 different taxes and collects approximately $26.7 billion every year. It is also responsible for managing and enforcing the payment reporting and receipt of taxes and fees owed to the state. It manages the allocation of the collected taxes for social service programs, education, local government aid, property tax relief, highways, economic development grants and incentives for businesses, and other state programs and operations.

The Department is headed by the Commissioner of Revenue, who in turn is directly responsible to the Governor for the supervision of Minnesota's revenue system.

The Divisions under the Department of Revenue include:

  • Appeals and Legal Services
  • Business Planning and Improvement
  • Building Management
  • Collection
  • Corporate Franchise
  • Communications
  • Criminal Investigation
  • Financial Management
  • Human Resources Management
  • Information Systems: MNIT Partnering with Revenue
  • Individual Income Tax and Withholding
  • Property Tax
  • Special Taxes
  • Sales and Use Tax
  • Tax Operations
  • Tax Research

The Minnesota Department of Revenue is also responsible for enforcing tax laws. Therefore, the Department may investigate and seek criminal charges or other penalties, and recommend civil action or criminal prosecution when taxpayers do not obey the law.

The contact details of the department are as follows:

Minnesota Department of Revenue

600 North Robert Street

Saint Paul, MN 55101

Phone: (651) 556-3000, (800) 657-3666

The operating hours of the department are between 8:00 a.m. and 4:30 p.m, Monday through Friday.

Minnesota Marijuana Business