The regulated marijuana market in Minnesota is expected to grow to more than $1.5 billion per year by 2029, according to a projection from a leading cannabis law firm. As the market matures, Minnesota cannabis businesses are projected to serve nearly 700,000 adult-use cannabis customers and medical marijuana patients across the state.
At a recent seminar on cannabis entrepreneurship hosted by Surly Brewing in Minneapolis, Travis Copenhaver, a partner at cannabis and psychedelics law firm Vicente LLP, said Minnesota’s legalization of adult-use cannabis, which was signed into law by Democratic Governor Tim Walz last month, presents new economic opportunities for entrepreneurs in the state.
“The growth of Minnesota’s cannabis market will be a lucrative opportunity for people interested in the adult-use cannabis market,” said Copenhaver.
The market analysis from Vicente projects that the growth of Minnesota’s adult-use cannabis market will largely follow patterns in other states that have legalized recreational marijuana for adults. Once adult-use cannabis sales begin, the market is expected to be characterized by limited supplies of recreational marijuana, leading to high prices. But as more producers and retailers enter the market, supplies will increase and prices will drop, with the state’s total cannabis economy expected to peak at about $1.5 billion per year by the end of the decade.
The projection estimates that approximately 650,000 Minnesotans, about 15% of the state’s population aged 21 and up, will consume cannabis on a monthly basis or more frequently. But getting current recreational cannabis consumers to transition to the regulated market will not happen overnight. The analysis projects that it will take until 2030 for the vast majority of consumers to buy cannabis from regulated retailers.
New Products For New Customers
Brian Vicente, founding partner at Vicente LLP, said that Minnesota’s consumers have been primed for the legalization of cannabis for adults with last year’s legalization of hemp-derived edibles and beverages. He also noted that consumers in neighboring states that have not yet legalized recreational marijuana and other visitors to Minnesota will also help fuel the growth of adult-use cannabis sales in the state.
“I think Minnesota stands to have a fair amount of tourist traffic from individuals that are coming from Iowa and North Dakota … to buy Minnesota products,” Vicente said.
Colin Ferrian, a Minnesota native and cannabis industry veteran who serves as a portfolio manager for the cannabis investment firm Poseidon, recently said that the legalization of recreational marijuana will lead to new innovations in the regulated cannabis industry.
“Minnesota is poised to become the most innovative location for cannabis products and branding, upon Governor Walz’s approval of adult-use legalization,” Ferrian said in a statement to Forbes.
“Last July, the state was the first in the country to allow hemp-derived drinks and edibles to be sold across many of the channels where consumers could find alcohol, and soon, Minnesotans over the age of 21 will also be able to access flower and extracted products in dispensaries,” Ferrian added.
Minnesota Legalized Cannabis Last Month
Minnesota ended the prohibition on marijuana last month when Walz signed legislation to legalize adult-use cannabis. The legalization bill, which was approved by the Minnesota legislature on May 20, allows adults 21 and older to use marijuana recreationally and to possess up to two ounces of cannabis in a public place, beginning on August 1.
The bill also legalizes the possession of up to two pounds of marijuana in a private residence and the limited home cultivation of cannabis by adults aged 21 and older. Under the legislation, adults would be allowed to grow up to eight cannabis plants at home, including four mature, flowering plants.
The bill also legalizes commercial cannabis production and sales, with regulated sales of recreational marijuana coming after rules are drafted and approved by the Office of Cannabis Management, a new state agency created by the legislation. The new agency will also regulate medical marijuana and cannabis products derived from hemp.
State agencies have set a target date of May 2024 to begin accepting applications for adult-use cannabis retailers, according to a report from Minnesota Public, with dispensary sales of recreational marijuana anticipated to start in January 2025. Once regulated sales of recreational marijuana begin, adults will be permitted to purchase up to two ounces of cannabis, eight grams of cannabis concentrate and edible products containing up to 800 milligrams of THC.