Minnesota to Crack Down on Sale of Cannabis Flower Labeled as Hemp

Minnesota will be cracking down on illegal sales of raw cannabis flower labeled as hemp, as it ramps up to roll out its state-legal adult-use cannabis program, with sales slated to begin in the first quarter of 2025. The state’s Office of Cannabis Management (OCM) issued a press release March 12 announcing “it will begin enforcement to prevent the illegal sales of raw cannabis flower across Minnesota,” in response to complaints it has received of retailers selling cannabis flower under the label of hemp flower.

To support the enforcement efforts, the OCM has entered into an agreement with the Minnesota Department of Health (MDH) to add inspection capacity for illegal sales of raw cannabis flower to its existing capacity for conducting inspections of retailers selling legal hemp-derived cannabinoid products. OCM will add additional inspection capacity using a field mobile testing unit and through a contracted testing lab.

What has been considered by many as a loophole in hemp regulations has led to a significant increase in sales, including interstate sales, of flower containing less than 0.3% tetrahydrocannabinol (THC) but above 0.3% total THC (THC and tetrahydrocannabinolic acid (THCA)) labeled as hemp.

THCA is the non-intoxicating acid form of THC, which, when heated, converts to intoxicating THC.

THCA sales in the U.S. increased to more than $203 million in 2023 from a “negligible” amount in 2022, according to cannabis market analysis and forecasting firm Brightfield Group. In 2023, THCA comprised 7.32% of the hemp-derived THC market.

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Some states do not test for total THC, and hemp regulations in those states consider flower containing less than 0.3% THC as legal hemp. Minnesota law, however, does not allow for the sale of any products containing more than 0.3% of any THC on a dry-weight basis.

State inspectors will review raw flower products’ certificates of analysis for test results on total THC, and any retailers found to be selling illegal products exceeding 0.3% delta-9 THC on a dry-weight basis “could be faced with embargo of product and fines of up to $1 million for violating state law,” according to OCM’s recent announcement. “Additionally, violations may impact a person’s ability to receive a license for a cannabis business.”

According to the press release, OCM notified via letter all retailers registered with MDH that the raw flower inspections will begin immediately and “encourages retailers to review products that they are currently selling and ensure that the products fall within legal limits.”

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“Our primary goal at the Office of Cannabis Management is to ensure a safe, legal cannabis industry that protects public health and provides accurate, reliable information to adult consumers,” said Charlene Briner, OCM interim director, in the release. “This interagency agreement gives us capacity to conduct inspections during this transitional implementation period, and more fully integrates the work of the MDH inspectors who will eventually transition their work to OCM.”

In addition to expanding inspection and testing capacity, OCM is asking the state legislature to expedite the timeline—from March 2025 to as early as July 1 this year—for transitioning hemp-derived cannabinoid enforcement from MDH to OCM. “The early transition is something OCM has identified as both a capacity-building strategy and a way to better align and integrate the regulatory work that will all eventually fall under the authority of OCM,” the release stated.

“While this is a temporary issue that will no longer exist once businesses are licensed to sell cannabis flower, OCM’s commitment to ensuring an industry that abides by all legal requirements is steadfast and ongoing,” Briner said. “We are confident that by providing clear expectations and guidance to businesses, the majority of operators will choose to follow the law.”