Minnesota Cannabis: Apply for Your Lower-Potency Hemp Edible License by October 31st

The lower-potency hemp edible licensing window is open, through October 31st

Last month, I gave a big picture status update on cannabis licensing in Minnesota, highlighting the application window for lower-potency hemp edible (LPHE) licensing. LPHE products are a very hot market in Minnesota, and have been for a while. The LPHE application window opened on October 1st, as advertised, and is set to close on October 31st.

How are LPHE products defined in Minnesota?

Under Minnesota law, LPHE’s are products intended for eating or consuming as a beverage. These products contain hemp concentrate or artificially derived delta-9 THC, combined with food ingredients. The full definition is available at 342.01(50). Of note, LPHEs cannot:

• Contain any artificially derived cannabinoid, other than delta-9 THC.
• Contain cannabis flower, cannabis concentrate, or a cannabinoid derived from cannabis.
• Exceed allowed serving sizes and packaging limits.

Who can sell LPHEs, and when?

It’s important to note that manufacturing and selling LPHEs and hemp-derived consumer products is limited to cannabis business license holders. Many of these cannabis licensees are hemp businesses that registered with the Office of Cannabis Management (OCM) under a conversion protocol prior to August 31st. Other hemp licensees cannot manufacture and sell these products. Related, OCM has been clear that:

“At the close of the LPHE application period, OCM will begin enforcement actions against unlicensed sellers of lower-potency hemp edible products, who have not submitted an LPHE license application, are not in the application process for a cannabis business license or have not successfully obtained a cannabis business license.”

What endorsements are available to LPHE licensees?

A variety of endorsements are available to LPHE retailers (LPHE-R), manufacturers (LPHE-M), and wholesalers (LPHE-W). These endorsements carry no additional costs beyond the baseline, license application fees. Below is a breakdown of endorsements by type, lifted directly from the relevant OCM guidance.

Edible cannabinoid product handler endorsement

This is required to manufacture, process, sell, handle, or store LPHEs (unless the LPHE is in final packaging). This endorsement is required for all LPHE-M license holders. This endorsement also allows LPHEs to be manufactured at the same premises where food is manufactured.

Lower-potency hemp extraction and concentration endorsement

This is required to manufacture hemp concentrate or artificially derived cannabinoid products. All methods of extraction, concentration, and conversion, and all volatile chemicals intended to be used must be disclosed to OCM prior to receiving this endorsement. For LPHE-M license holders who are performing extraction or concentration of cannabinoids, or conversion of artificially derived cannabinoids, additional certifications are also required before beginning operations. Such LPHE-M license holders must obtain third-party certifications from an independent industrial hygienist or a professional engineer for the following: (a) all electrical, gas, fire suppression, (b) exhaust systems; and (c) plans for the safe storage and disposal of hazardous substances, including but not limited to any volatile chemicals.

On-site consumption endorsement

This is required for an LPHE-R license holder to allow on-site consumption at their establishment. This endorsement is only available to LPHE-R license holders. This endorsement also authorizes the business’s participation at an off-site hemp-derived/related event subject to compliance with any applicable local regulations.

Lower-potency hemp retail operations endorsement

This is required for an LPHE-R license holder intending to operate a retail establishment to sell LPHE products to customers who are 21 years of age and older. There are no additional application requirements necessary beyond the application requirements for an LPHE-R license.

Delivery endorsement

This is required for an LPHE-R license holder intending to deliver LPHE products directly to customers aged 21 years and older. The endorsement requires the applicant to submit: (a) proof of insurance for each vehicle or general liability insurance with a limit of at least $1,000,000 for each occurrence; (b) a business plan demonstrating policies to avoid sales of LPHE products to individuals who are under 21 years of age; and (c) evidence the business will comply with applicable requirements. Additionally, an LPHE-R license holder with a delivery endorsement must: (x) ensure LPHE products are not visible from outside the delivery vehicle; and (y) ensure a vehicle that contains LPHE products is either attended by an employee or secured by turning off the ignition, locking all doors and storage compartments, and removing operating keys or device.

Lower-potency hemp edible importer endorsement

This is required for a LPHE-W license holder intending to import LPHEs that are manufactured outside of the state with the intent to resell the products. This endorsement is only available to LPHE-W license holders and cannabis wholesaler license holders.

Transporter endorsement

This is required for a LPHE-W license holder intending to transport LPHE products to other businesses. The endorsement requires the applicant to submit additional application materials. Transportation of LPHE products is otherwise authorized for LPHE-M and LPHE-R license holders and does not require a specific endorsement for these two licenses

Lower-potency hemp product exporter endorsement

This endorsement is available to LPHE-M and LPHE-W license holders and is required if the license holder intends to manufacture or purchase, store, transport, or sell products containing cannabinoids that do not qualify as LPHE products and are intended for sale outside of Minnesota. License holders seeking this endorsement must abide by requirements for manufacturing, storage, and transport.

What else does OCM guidance cover on the LPHE application process?

The OCM guidance also contains detailed information on the supply chain overview, registration requirements (including application fees), licensing timelines, local government considerations, how to begin business operations, allowable business activities, and product requirements. If you are in the LPHE game, I’d strongly suggest you check it out.

What to do now

For now, all eligible applicants should focus on getting those LPHE applications in prior to the October 31st deadline. Please contact us if you have any questions on this process, or Minnesota cannabis more generally.