Minnesota Judge Orders State to Resume Cannabis License Lottery for Social Equity Applicants

A Minnesota judge has ordered state regulators to reinstate a lottery that could define the future of legal cannabis in the state. The Office of Cannabis Management (OCM) is now legally bound to move forward with preapproval licenses for social equity applicants, after abruptly canceling the process last December.

It’s a major decision with real-world consequences. These 648 applicants—many of whom qualify due to past cannabis convictions or other socioeconomic factors—had been left hanging for months. Now, they’re one step closer to opening dispensaries.

The Backstory: What Went Wrong?

Let’s rewind. Governor Tim Walz signed a law to legalize recreational marijuana back in May 2023. The intent? A legal market by early 2025. Minnesota was aiming to not just legalize weed, but to do it fairly—giving a leg up to those disproportionately affected by previous marijuana laws.

But then the OCM hit the brakes.

In December, the agency halted the licensing preapproval process without warning, citing administrative concerns. That decision sparked backlash—and eventually, a lawsuit. Applicants who’d cleared eligibility checks and were waiting for the lottery were left stunned and frustrated.

Judge Stephen L. Smith didn’t mince words. In his April 4 ruling, he stated the OCM has a “clear legal duty” to follow through with the social equity license lottery. And failing to do so was a breach of that duty.

Legal Language, Real Impacts

This isn’t just a bureaucratic issue. For hundreds of aspiring business owners, this lottery represents real opportunities—jobs, income, investment, legacy. Many of them had already started making plans, signing leases, seeking capital, even prepping storefronts.

Smith’s decision, at its heart, centers on legislative intent. The adult-use cannabis law was crafted with equity baked in, and the judge made clear that intent isn’t optional.

One sentence stands out: “It has failed to do that and has expressed publicly that it does not intend to conduct a separate social equity lottery,” Smith wrote. In short, the court wasn’t buying the OCM’s explanations.

Who Are the 648 Applicants?

These aren’t just numbers on paper. Behind every application is a story.

Social equity applicants typically include:

• People with prior cannabis-related convictions

• Residents of underprivileged or over-policed communities

• Family members of people convicted on cannabis charges

• Veterans and farmers from economically disadvantaged backgrounds

By law, these groups were supposed to have first dibs in the licensing process. That’s the whole point of the early preapproval lottery: to give them a head start before the broader application pool opens.

It’s not just fair policy—it’s smart economics. In states like Illinois and California, equity-focused approaches have seen mixed results, often because of poor execution. Minnesota had a shot to do it right.

What Happens Now?

The OCM is back in the spotlight—and on the clock.

It’s now required to conduct the social equity lottery as originally planned. But the timeline? Still murky. The ruling didn’t spell out a deadline, and the agency hasn’t issued a public statement yet detailing next steps.

Still, the legal language is hard to ignore. The judge said the OCM’s duty “is not discretionary.” Translation: do it, and do it now.

Meanwhile, the state’s goal to kick off recreational cannabis sales in early 2025 is looking increasingly shaky. Any further delays in licensing could push that date back even further.

Here’s a quick look at the current timeline versus what might happen next:

Industry Reaction: Relief, But Also Frustration

For cannabis entrepreneurs and advocacy groups, the court’s ruling is bittersweet. Relief, because justice was served. But frustration, too—because it took a legal fight to get there.

Several applicants said the last few months have been “emotional whiplash.” Many had paused or even walked away from potential business opportunities, unsure if the lottery would ever happen.

“This isn’t just about weed,” said one Minneapolis-based applicant who asked to remain anonymous. “This is about who gets to build wealth and who’s shut out. We followed the rules. The state didn’t.”

Some called for leadership changes at the OCM. Others urged lawmakers to step in and provide stronger guardrails. After all, confidence in the rollout is already shaky—and a botched process could turn public support into public frustration.

The Political Fallout Might Just Be Starting

It’s too soon to say if this ruling will snowball into broader scrutiny of Minnesota’s cannabis regulators, but the pressure’s on.

Governor Walz, who championed the legalization bill, hasn’t commented directly on the court ruling. But insiders say he’s keeping a close eye on how the OCM handles the reset.

This also reopens a broader question: How well is Minnesota really prepared for a legal weed market? Licensing delays, staffing issues, and now legal battles aren’t exactly confidence boosters.

Lawmakers may need to revisit the law’s implementation language or add new oversight. The last thing the state wants is to be compared unfavorably to states where legalization turned chaotic.

One thing’s for sure: the clock is ticking. And those 648 applicants? They’re watching every move.