Do you have any sense of what the right size of the agency will be ultimately?
I think it definitely needs to be bigger than [the current size], and I think that what I've learned from my counterparts in other states is that we're in a very fortunate position in Minnesota. The Legislature recognized that we should be funded as an agency with an appropriation, rather than funded through fees and fines. What you see in other states is when they're funded through fees and fines and licensing application fees, that when the market is volatile and applications drop or enforcement fines drop off, that they are in a position of having to cut staff or “right size.” So we don't have that in Minnesota.
All of that said, based on what I've seen, the original fiscal note contemplated about 125 employees. I've always anticipated that that's a little low and that we would probably want to think about making sure we were in the neighborhood of about 150, just to carry out that work. And I think that as we continue to mature over time, we'll find a better sense of what the right staff complement is.
Are there any updates you can share with regard to tribal compacts?
I can tell you that we are engaged with six tribes right now, soon to be seven tribes. Those conversations are unique to each tribe, depending on how they want to enter the space. Some have indicated they are only interested in cultivation. Some have indicated they're only interested in retail. Others have indicated an interest in being vertically integrated and serving the larger commercial market in a more holistic way. Those conversations are ongoing. Obviously the governor's office is the lead, because it is a government-to-government negotiation. But we feel good about where compacting stands, and we're very excited about our tribal partners and their capacity to serve a larger commercial market, in addition to all of the operators that are eager to get into this space.
How do the potential tribal compacts factor into the OCM’s thinking about the future market? For example, if there are a small number of tribally owned retail stores operating in some cities outside of tribal lands in early 2025, would you consider that to be meeting the goal of launching a retail market by early 2025?
I think that, yes, we would consider that part of it, one piece of it. But I would also say that they won't be operating outside of tribal lands until a compact is in place, so the timing of those compacts is obviously tribal nation-dependent.
If and when any tribal compacts are agreed to, do you expect that the tribes will be required to abide by Minnesota laws and regulations related to cannabis if they sell products outside of tribal lands, or do you think they could be allowed to follow their own regulations?
I think that those are part of the conversations in compacting. Obviously, because they are confidential conversations and negotiations, what I can say broadly is that the tribes have a vested interest in having regulatory standards that are similar, if not the same or even more rigorous than Minnesota's rules that will be in place, because their success in the larger commercial market will depend on consumers having confidence in the products they're purchasing – whether it's from a tribally run dispensary off tribal lands or a traditionally licensed operator from OCM. We haven't had any indication in our conversations that tribes are looking to have a lower standard of safety and information with their products.
What are the OCM’s top enforcement priorities right now?
I would say that where we're really spending time right now is developing our enforcement presence. What we have seen is the challenge that comes when you legalize before there's a regulatory and enforcement structure in place, it can open the door to a lot of confusion or lack of understanding among both operators and the public. So establishing an enforcement presence working with operators in a theory of action that is education to compliance. That means helping them understand the expectations – what the law allows and what is not allowed. Upon repeat inspection, if they're still demonstrating an inability to meet those standards, then there's an escalating series of enforcement including corrective action and penalty.
We have a lot of education to do, particularly in the hemp-derived space, and also with folks who originally didn't understand that the sale of cannabis flower requires a license. Just because possession, consumption and home grow are legal now, that doesn't mean that commercial sales are legal until a license has been obtained. I would say that those really are our enforcement priorities – communicating, educating and then holding those operators accountable.
Are there any additional legislative changes the OCM expects to push for in next year's session?
We're in the process right now of developing our proposals, both budget, because we're going into a big budget year, and policy. I wouldn't anticipate what we saw this last session from a policy perspective. I think that we're still learning as we go, but I'm not looking to have a policy package that would have a lot of large or wholesale changes. I think there are small things, technical fixes [and] language inconsistency. It was a 381-page law when we started, with another 100 pages that were added. There's just some technical cleanup to be done.
You may have seen reporting about the fact that stays of adjudication were not contemplated in social equity status. That's certainly something that the Legislature is interested in looking at, because you could argue that somebody who was convicted but received a stay still experienced the collateral consequences of the “War on Drugs.”
So we're still in development. Obviously those policies won't be out for public consumption until the governor makes decisions about what packages to put forward. I would say, from a budget standpoint, we just need to make sure that we have sufficient funds to be able to carry out our regulatory and enforcement and all of the other responsibilities given to us under Chapter 342. So more to come on that, but I wouldn't expect to see what we saw last session.
Knowing what you know now, is there anything you would do differently if you had the opportunity for a do-over in this whole process?
I don't know that I would do anything different from an implementation standpoint. I think that there are fair conversations to be had about the challenges that come when you do legalize prior to having a regulatory structure in place. I've over-used the analogy to building the plane while you're flying it. That creates some challenges.
I would also say OCM had a unique challenge compared to some of the other new work that was given to agencies in 2023. For instance, paid family leave is housed within [the Minnesota Department of Employment and Economic Development], which has existing infrastructure with HR and finance and human resources, you know, all of those things. The Department of Children, Families and Learning, which is a new department, has existing staff and programs and standard operating procedures in place. OCM was unique in that it was created as an independent agency, and we literally had to build from the ground up. That created some challenges, and it created, I think, pressure on the staff that is here to work quickly in real time while building. That can be hard for the public, who just assumes there's an OCM fully ready to go, and that's not the case. I don't know if I have suggestions about what I would do differently. I would just note that that's been a singular challenge.
Is there anything that I haven't asked about that you would like our readers to know?
The thing I would note is that I'm really proud of the people who are doing this work. We're doing it under incredible scrutiny, incredibly high expectations among both consumers and prospective business operators. And we're doing it without data to help us project and plan. Everything we're doing, we're doing for the first time. I'm incredibly proud of the people who are working fast and furious – even though a lot of that work is somewhat invisible to the public – to make sure that we launch on the timelines that we have and to make sure that we launch well, so that consumers will have access to a safe and equitable cannabis market in 2025 that will continue to grow and mature.
