HF 3818

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/05/2026 04:51 p.m.

A bill for an act
relating to cannabis; modifying definition of true party of interest to exclude
municipal cannabis stores; amending Minnesota Statutes 2024, section 342.185,
subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 342.185, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) As used in this section, the following terms have the
meanings given.

(b) "Control" means the power to independently order or direct the management,
managers, or policies of a cannabis business.

(c) "Financial institution" means any bank, mutual savings bank, consumer loan company,
credit union, savings and loan association, trust company, or other lending institution under
the jurisdiction of the Minnesota Department of Commerce, the United States Department
of Commerce, or both.

(d) "Financier" means any person that:

(1) is not a financial institution or government entity;

(2) provides money as a gift, grant, or loan to an applicant for a cannabis business license,
a cannabis business, or both; and

(3) expects to be repaid for the money provided, with or without reasonable interest.

(e) "Gross profit" means sales minus the cost of goods sold.

(f) "Revenue" means the income generated from the sale of goods and services associated
with the main operations of a business before any costs or expenses have been deducted.

(g) new text begin (1) new text end "True party of interest" means an individual who as an individual or as part of
another business:

deleted text begin (1) deleted text end new text begin (i) new text end is a sole proprietor of a sole proprietorship;

deleted text begin (2) deleted text end new text begin (ii) new text end is a partner in a general partnership;

deleted text begin (3) deleted text end new text begin (iii) new text end is a general partner or limited partner in a limited partnership, a limited liability
partnership, or a limited liability limited partnership;

deleted text begin (4) deleted text end new text begin (iv) new text end is a member of a limited liability company or a manager in a limited liability
company;

deleted text begin (5) deleted text end new text begin (v) new text end is a corporate officer or director or holds an equivalent title in a privately held
corporation;

deleted text begin (6) deleted text end new text begin (vi) new text end is a stockholder in a privately held corporation;

deleted text begin (7) deleted text end new text begin (vii) new text end is part of a multilevel ownership structure;

deleted text begin (8) deleted text end new text begin (viii) new text end has membership rights to a nonprofit corporation in accordance with the
provisions of the articles of incorporation or bylaws for the nonprofit corporation;

deleted text begin (9) deleted text end new text begin (ix) new text end has the right to receive some or all of the revenue, gross profit, or net profit from
a cannabis business during any full or partial calendar or fiscal year; or

deleted text begin (10) deleted text end new text begin (x) new text end has the right to exercise control over a cannabis business.

new text begin (2) new text end True party of interest does not include:

deleted text begin (1) deleted text end new text begin (i) new text end an individual receiving payment for rent on a fixed basis under a lease or rental
agreement;

deleted text begin (2) deleted text end new text begin (ii) new text end an employee of a cannabis business who receives a salary or hourly rate
compensation if the employee does not otherwise hold an ownership interest in the cannabis
business or have the right to exercise control over the cannabis business;

deleted text begin (3) deleted text end new text begin (iii) new text end an individual who receives a bonus or commission based on the individual's
sales, if the bonus or commission does not exceed ten percent of the individual's sales in
any given bonus or commission period and the terms of the bonus or commission-based
compensation agreement is in writing;

deleted text begin (4) deleted text end new text begin (iv) new text end an individual with an ownership interest held or acquired solely for the purpose
of passive investment as described in Code of Federal Regulations, title 31, section 800.243;

deleted text begin (5) deleted text end new text begin (v) new text end an individual contracting with a cannabis business to receive a commission for
the sale of a business or real property;

deleted text begin (6) deleted text end new text begin (vi) new text end a consultant receiving a flat or hourly rate compensation under a written
contractual agreement;

deleted text begin (7) deleted text end new text begin (vii) new text end any person with a contract or an agreement for services with a cannabis business,
such as a branding or staffing company, as long as that person does not obtain any ownership
or control of the cannabis business; deleted text begin or
deleted text end

deleted text begin (8) deleted text end new text begin (viii) new text end a financial institution deleted text begin . deleted text end new text begin ; or
new text end

new text begin (ix) a person who contracts with a city or county to operate a municipal cannabis store
under section 342.32, subdivision 5.
new text end