A fresh regulation snag is cooling the buzz around Minnesota’s hemp shops just as hopes were rising for new cannabis licenses. Starting this October, hemp businesses in Minnesota will be required to carry a license—but the state’s new rule for cannabis retailers demands product labels to list the license number for every party involved in the “seed-to-sale” process. That poses a problem: most hemp producers aren’t licensed—federal laws allow hemp, and states don’t require licensing yet in many cases, and Minnesota hasn’t issued hemp licenses so far.
Take St. Paul Cannabis, a local outfit that’s been selling hemp-based THC beverages and edibles for about two and a half years. Owner David Mendolia has his sights set on adding a recreational marijuana license, but he wants to keep offering beloved hemp-derived items to his customers. The new labeling rule, however, makes that nearly impossible. Since Minnesota won’t start licensing hemp until October, most suppliers won’t have license numbers to put on labels. Mendolia explained that if his retail license came through tomorrow, the products he’s currently stocking would immediately become illegal.
The Minnesota Office of Cannabis Management has confirmed that no product can be sold without a cannabis license and correctly labeled—meaning retailers without proper tags risk having to destroy all inventory. Mendolia hopes for a quick fix to avoid that scenario, stating bluntly that neither the state nor the industry wants to see licensed businesses forced to dump stock.
Hemp store owners are also bracing for a financial hit. Patty Gilk, who stocks multiple Jes Naturals stores, expects that from October she’ll either need a costly $10,000 distributor license or must rely on a middleman—either way, pricing will suffer and the range of products available to customers will shrink.
On top of that, a tax increase is looming: starting in July, Minnesota’s cannabis tax will climb from 10% to 15%, and it applies to marijuana and hemp-derived products alike—even non-psychoactive CBD.
In short, Minnesota’s push to align hemp with broader cannabis regulations is running into practical snags: labeling requirements, licensing delays, taxes and supply-chain hurdles. Unless state officials step in with adjustments, hemp shop owners say the new rules could cripple their businesses within months.
