Matt DeLong: Can you say any more about when you expect the first tribal compacts to be finalized?
Eric Taubel: I think it's hard to know for certain when we'll get the official pen to paper. The first negotiations started really in the fall of ’23 and then it continued throughout 2024. They picked up intensity over the summer and fall. So we feel like we're getting close. In some ways. Every time you think you’re almost to the end, there's a little bit of an issue that bubbles up. I would anticipate that pretty shortly – in the next month or two – we'd see some agreements.
Ryan Faircloth: What's the latest on rules and when those might be done?
ET: Rules comments closed on Feb. 12. We got a substantial amount of comments. A lot of the feedback was related to some of the provisions around things like potency limits. But otherwise it feels like we've got a little bit of work on our end to go through those comments. We want to make sure that we give each of them the thorough review they deserve.
We have a team internally that's been putting together a list of what things we think we need to change, what things we would like to change, what things have to change. We'll make those decisions and work with the Revisor’s Office to get those changes put in place. Once they're in place, we then petition the administrative law judge over at the Office of Administrative Hearings to review our rules and give us the thumbs up or thumbs down.
RF: Do you have a timeline on when you think this might be done?
ET: We're still on the timeline we've been on. Now that I'm not the general counsel, I'm way more excited to assign things to the legal department to do on unreasonable timelines, since I don't have to do it. We've tasked them with that project and we're going to try to get that turned around as fast as possible, so we can continue to meet our goal of end of March, early April, we're publishing the notice of adoption. That's always been the goal. We're meeting our internal deadlines to make that happen.
MD: When do you think Minnesotans can expect to see a well-supplied market? Could that possibly be late this year or more likely next year?
ET: My gut is that, as we get towards the fall and winter of 2025, it'll look pretty robust. I think it’ll be that sense where, out of nowhere, it will be, “Oh yeah, there's a bunch of cannabis retailers around here now, and there used to not be.” But it will slowly creep up in a way that makes it seem like it goes overnight. That’s what I would anticipate.
Over the last year or so, we've seen a number of operators that have talked about being ready and are in positions to get going. I know a lot of them are making preparations now, so as they get licensed, they don't have a lot of delays.
RF: Why do you think Minnesota has taken longer than some other states to go from legalization to retail sales?
ET: I think about this a lot, because it's obviously something that people say a lot. I will preface by saying, it doesn't feel like it's been a long time to me. It feels like I just started the last job and certainly just started this job. I also know that the people that work at OCM are doing really good work and working really hard, and so the idea that it's slow is in contrast with that lived experience of my co-workers.
That said, I think there are three categories that affect market launch speed. The first is existing cannabis infrastructure, and a pivot off that is a willingness to leverage that existing infrastructure.
The second is administrative law processes. How hard is rulemaking within your market?
And the third is office location [and] agency launch.
In the first bucket, most states do have pretty substantial cannabis infrastructure and choose to leverage it. So in that regard, if you have 98 licensees, you can dual-license. It's not that difficult to say, “OK, now you can do both.”
Similarly, I think Massachusetts had 30 to 40 or 50 [licensees] that they were able to launch with. Obviously, Colorado had a huge existing medical infrastructure when they launched and they just sort of pivoted and turned it on. That's a big deal.
Even in Minnesota, and Rep. [Zack] Stephenson said this in last week’s commerce hearing, that we simply don't have that infrastructure in Minnesota. So even if we had said on Day One that medicals now can do adult-use, it really wouldn't be enough to serve the market. And it would really imperil medical cannabis access for medical cannabis patients.
The second is rulemaking. A lot of states have, from my vantage point, pretty easy rulemaking processes. The Legislature says, make rules on this, and then they just publish the rules. And those are the rules. That's a pretty quick process.
In Minnesota, we have to get it into a specific form. That has to be done by the Revisor's Office and then has to go through an administrative law process; there has to be public comment. Generally speaking, best case scenario in Minnesota, it's a year to do any kind of rulemaking. If it's complicated, it's 18 months to two years. We're on a pretty good tight run with that.
The last thing I would note is that most agencies that have independent cannabis offices, those launch as independent after the market launches. Normally they're put inside an existing state agency – a Department of Commerce, a Department of Revenue, whatever it might be. Eventually they break off and become their own stand-alone agency.
Recognizing it's a multibillion-dollar market and that it's important to build experience and knowledge within the office, I think it was a smart choice to create the office at the same time you create the market. But that does carry some collateral consequences in terms of timing, because in order to write the rules you have to have lawyers and subject matter experts in the building. In order to do that you have to have an HR director who can write the position descriptions. So there's a couple pieces that have to be built first and I think this is always what interim director Briner was saying when she said we're building the plane while we're flying it. The plane was the office.
So Minnesota, on all three of those measures, has chosen a path that makes the launch maybe take longer. I think overall it'll be a better market because of these choices. But there are trade-offs that are made based on each of those categories.
