Minnesota Cannabis Grant Programs Aim to Help Entrepreneurs Succeed and Promote Social Equity

By Jason Tarasek

Oct 23, 2023

An under-discussed aspect of Minnesota’s adult-use cannabis legislation is the grant programs established to help cannabis entrepreneurs understand the law and succeed in this nascent market. 

The legalization bill establishes three programs: Cannabis Industry Startup Financing Grants, Cannabis Industry Navigation Grants, and Cannabis Industry Training Grants, which will be administered by the Minnesota Department of Employment and Economic Development (DEED).

The bill also establishes the CanRenew and CanGrow programs. Starting in 2026, the CanRenew program will award $15 million each year to eligible organizations in communities of people who would qualify as social-equity licensing applicants. Through CanGrow, eligible organizations will receive money to help farmers navigate cannabis regulations, and nonprofit corporations will receive money to fund loans for cannabis farmers. The cannabis grant programs are discussed below.

Cannabis Industry Startup Financing Grants – CanStartup

Through the CanStartup program, DEED will award grants to nonprofit corporations to fund loans for new cannabis microbusinesses and to support job creation in communities where long-term residents are eligible to qualify as social equity applicants. The bill allocates $3 million annually to the CanStartup revolving loan account.

A “microbusiness” is one of more than a dozen license types created through the bill and one of only two licenses that would allow businesses to be “vertically integrated.” Such vertically integrated businesses may grow, manufacture, and sell adult-use cannabis.

According to the bill, a “social equity applicant” would receive at least a 20-percent boost of the “total available points” during the process by which the Office of Cannabis Management (OCM) evaluates license applications for approval.

To qualify for the social equity boost, applicants must demonstrate that:

• They or a member of their family have a cannabis-related criminal conviction
• They are a military veteran who lost honorable status because of a cannabis-related offense
• They are a long-time resident of an over-policed or low-income neighborhood
• They qualify as an “emerging farmer”

Through a competitive selection process, DEED will award grants to nonprofit corporations as part of the CanStartup program. DEED is directed through the bill to establish a process that will evaluate nonprofit corporations seeking grants based upon factors including an applicant’s:

• Experience creating jobs for people facing barriers to education or employment
• Familiarity with economic development programs and projects
• Experience overseeing revolving loan accounts
• Established relationships with communities of people who would qualify for social equity status

The bill directs such nonprofits to prioritize loans to microbusinesses owned by social-equity applicants or located in social-equity communities. Once a nonprofit corporation approves a loan, DEED decides whether to approve the loan.

Such loans may be as much as $50,000 or up to $150,000 if the recipient matches the loan in an equal or greater amount. A recipient could receive a loan annually for six consecutive years. Such loans will accrue interest at the “Wall Street Journal prime rate,” which is currently 8.5 percent. The nonprofit may charge an origination fee of no more than one percent of the loan value.

Cannabis Industry Navigation Grants – CanNavigate

In addition to the CanStartup grants, the bill directs DEED to establish CanNavigate. This program will award grants to organizations to help individuals navigate the regulatory structure of the cannabis industry. The bill allocates $1 million per year for the CanNavigate program.

The organizations may use the grant money to develop technical assistance resources relevant to the regulatory structure of the cannabis industry and to provide technical assistance navigation services directly to individuals.

Such grants will be issued on a competitive basis based on factors including:

• The applicant’s experience and plan for providing technical assistance or navigation services to individuals, particularly those people who would qualify for social equity status
• An estimated cost of such services
• The applicant’s financial stability

The bill provides greater weight to those organizations with a demonstrated record of success, particularly in providing such services to people who face barriers to education or employment.

Cannabis Industry Training Grants – CanTrain

Finally, the bill directs DEED to establish CanTrain, a program that will award grants to organizations and individuals for cannabis job training. The bill allocates $2 million per year for the CanTrain program.

Through a competitive grant process, DEED will award job-training grants to organizations based upon factors including:

• An organization’s ability to train people for jobs in the cannabis industry, particularly people facing barriers to education or employment
• Cost, ability, and demand for the particular job training
• The organization’s financial stability

The bill emphasizes hands-on training.

Additionally, DEED shall award up to $20,000 to individuals for cannabis job training through a “lottery process.” An applicant will receive one entry in the lottery, plus an additional entry if:

• They qualify as a social equity applicant
• They seek training that would result in an industry-relevant credential
• They are seeking hands-on training

An individual may use the grant money to pay the costs of job training, childcare, transportation, or other approved expenses.

These grant programs aim to break down some of the barriers to entering the market and set up Minnesota cannabis businesses for success. We’re looking forward to seeing how it all shapes up.    

Vicente’s Minnesota team is actively monitoring developments in Minnesota’s adult-use cannabis business, medical cannabis business, and hemp business program implementation. It’s never too early to start preparing for licensing by building your team, forming your business, applying for trademark protection, performing community outreach, finding real estate, and more! Please contact us for assistance in achieving your goals in this new cannabis market.

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