SF 3520

as introduced - 94th Legislature (2025 - 2026) Posted on 05/15/2025 09:36am

A bill for an act
relating to cannabis; modifying provisions related to employee stock ownership
plans; amending Minnesota Statutes 2024, sections 342.185, subdivisions 1, 2, 3;
342.28, subdivision 5; 342.29, subdivision 4; 342.30, subdivision 4; 342.31,
subdivision 4; 342.32, subdivision 4; 342.33, subdivision 3; 342.35, subdivision
3.

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.

new text begin (c) "Employee stock ownership plan" means a contribution plan as defined in United
States Code, title 26, section 4975(e)(7).
new text end

deleted text begin (c) deleted text end new text begin (d) new text end "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.

deleted text begin (d) deleted text end new text begin (e) new text end "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.

deleted text begin (e) deleted text end new text begin (f) new text end "Gross profit" means sales minus the cost of goods sold.

deleted text begin (f) deleted text end new text begin (g) new text end "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.

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

(1) is a sole proprietor of a sole proprietorship;

(2) is a partner in a general partnership;

(3) is a general partner or limited partner in a limited partnership, a limited liability
partnership, or a limited liability limited partnership;

(4) is a member of a limited liability company or a manager in a limited liability company;

(5) is a corporate officer or director or holds an equivalent title in a privately held
corporation;

(6) is a stockholder in a privately held corporation;

(7) is part of a multilevel ownership structure;

(8) has membership rights to a nonprofit corporation in accordance with the provisions
of the articles of incorporation or bylaws for the nonprofit corporation;

(9) 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

(10) has the right to exercise control over a cannabis business.

True party of interest does not include:

(1) an individual receiving payment for rent on a fixed basis under a lease or rental
agreement;

(2) 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;

(3) 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;

(4) 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;

(5) an individual contracting with a cannabis business to receive a commission for the
sale of a business or real property;

(6) a consultant receiving a flat or hourly rate compensation under a written contractual
agreement;

(7) 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

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

new text begin (9) a trust, including an employee stock ownership plan, and a trustor, a trustee, and
beneficiaries new text end .

new text begin (i) "Trustee" means a person or an entity legally appointed to manage and oversee assets
held in a trust for the benefit of designated beneficiaries and acting under a fiduciary duty
to uphold the trust's terms, protect the trust's assets, and act in the beneficiaries' best interests.
For the purpose of this section, a trustee includes a fiduciary, a special holdings adviser, a
custodian, a steward, a guardian, an agent, a conservator, a trust manager, a trust
administrator, a successor trustee, an executor, a trust protector, and any other person who
has a continuing duty to administer a trust.
new text end

Sec. 2.

Minnesota Statutes 2024, section 342.185, subdivision 2, is amended to read:

Subd. 2.

Application number limitations.

new text begin (a) new text end An individual may not be a true party of
interest for more than one application for (1) any single type of license, or (2) multiple types
of licenses if the individual would be prohibited from holding the licenses under section
342.18, subdivision 2.

new text begin (b) new text end The limitation does not apply to new text begin :
new text end

new text begin (1) new text end an individual who holds no more than ten percent ownership of the business entity new text begin ;
new text end

new text begin (2) the trustee of an employee stock ownership plan; and
new text end

new text begin (3) officers, managers, directors, or other employees of a business that is owned directly
or indirectly, in whole or in part, by an employee stock ownership plan new text end .

Sec. 3.

Minnesota Statutes 2024, section 342.185, subdivision 3, is amended to read:

Subd. 3.

License number limitations.

An individual may not be a true party of interest
for more than one license unless explicitly allowed by this chapter. The limitation does not
apply to new text begin :
new text end

new text begin (1) new text end an individual who holds ten percent or less controlling ownership of the business
entity new text begin ;
new text end

new text begin (2) the trustee of an employee stock ownership plan; and
new text end

new text begin (3) officers, managers, directors, or other employees of a business that is owned directly
or indirectly, in whole or in part, by an employee stock ownership plan new text end .

Sec. 4.

Minnesota Statutes 2024, section 342.28, subdivision 5, is amended to read:

Subd. 5.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis microbusiness license may also hold a cannabis event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis microbusiness license may own or
operate any other cannabis business or hemp business or hold more than one cannabis
microbusiness license.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license that a business may hold applies
to every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 5.

Minnesota Statutes 2024, section 342.29, subdivision 4, is amended to read:

Subd. 4.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis mezzobusiness license may also hold a cannabis event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis mezzobusiness license may own or
operate any other cannabis business or hemp business or hold more than one cannabis
mezzobusiness license.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license that a business may hold applies
to every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 6.

Minnesota Statutes 2024, section 342.30, subdivision 4, is amended to read:

Subd. 4.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis cultivator license may also hold a cannabis manufacturing license, license to grow
industrial hemp, and cannabis event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis cultivator license may own or operate
any other cannabis business or hemp business. This prohibition does not prevent the
transportation of cannabis flower from a cannabis cultivator to a cannabis manufacturer
licensed to the same person, cooperative, or business and located on the same premises.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end the office by rule may limit
the number of cannabis cultivator licenses a person, cooperative, or business may hold.

(d) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license a business may hold applies to
every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 7.

Minnesota Statutes 2024, section 342.31, subdivision 4, is amended to read:

Subd. 4.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis manufacturer license may also hold a cannabis cultivator license and a cannabis
event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis manufacturer license may own or operate
any other cannabis business or hemp business. This prohibition does not prevent
transportation of cannabis flower from a cannabis cultivator to a cannabis manufacturer
licensed to the same person, cooperative, or business and located on the same premises.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end the office by rule may limit
the number of cannabis manufacturer licenses that a person or business may hold.

(d) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license that a business may hold applies
to every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 8.

Minnesota Statutes 2024, section 342.32, subdivision 4, is amended to read:

Subd. 4.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis retailer license may also hold a cannabis delivery service license and a cannabis
event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis retailer license may own or operate any
other cannabis business or hemp business.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end no person, cooperative, or
business may hold a license to own or operate more than one cannabis retail business in
one city and three retail businesses in one county.

(d) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end the office by rule may limit
the number of cannabis retailer licenses a person, cooperative, or business may hold.

(e) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license a business may hold applies to
every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 9.

Minnesota Statutes 2024, section 342.33, subdivision 3, is amended to read:

Subd. 3.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis wholesaler license may also hold a cannabis transporter license, a cannabis delivery
service license, and a cannabis event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis wholesaler license may own or operate
any other cannabis business or hemp business.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end the office by rule may limit
the number of cannabis wholesaler licenses a person or business may hold.

(d) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, a restriction on the number or type of license a business may hold applies to
every cooperative member or every director, manager, and general partner of a cannabis
business.

Sec. 10.

Minnesota Statutes 2024, section 342.35, subdivision 3, is amended to read:

Subd. 3.

Multiple licenses; limits.

(a) A person, cooperative, or business holding a
cannabis transporter license may also hold a cannabis wholesaler license, a cannabis delivery
service license, and a cannabis event organizer license.

(b) Except as provided in paragraph (a) new text begin and section 342.185, subdivisions 2 and 3 new text end , no
person, cooperative, or business holding a cannabis transporter license may own or operate
any other cannabis business.

(c) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end the office by rule may limit
the number of cannabis transporter licenses a person or business may hold.

(d) new text begin Notwithstanding section 342.185, subdivisions 2 and 3, new text end for purposes of this
subdivision, restrictions on the number or type of license a business may hold apply to every
cooperative member or every director, manager, and general partner of a cannabis business.