In His Budget Proposal, the Minnesota Governor Proposes Funding for Marijuana Legalization and Expungements

On Tuesday, Minnesota’s governor released a proposed budget that includes money for several state agencies to handle marijuana legalisation and predictions for cannabis revenue as lawmakers try to progress legislation.

Hours before a House committee voted to adopt a legalisation bill that has passed through multiple committees in recent weeks, Gov. Tim Walz (D) presented his budget request for the 2024-2025 biennium.

In a press conference, Democratic Lt. Governor Peggy Flanagan said that “prohibition doesn’t work” and that “it is past time to safely legalise adult cannabis usage.”

To protect our financial future, we must legalise cannabis for adults. The goal is to increase the state’s economy and the number of available employment. It’s for the public’s health since it will permit us to oversee the cannabis business, guaranteeing that only high-quality, safe goods make it to market.

The goal is to clear the records of those whose only offence was to possess small amounts of cannabis so that they can have a second opportunity in life and help maintain public safety. The key is to realise that the status quo isn’t working and that we have the freedom to try something new.

The Governor’s office estimates that a new 15% gross receipts tax on marijuana sales would bring in $6 million in revenue within the first year of implementation. A total of $100 million will have been generated by 2027, up from the initial investment of $26.5 million in 2025 and $62 million in 2026.

It is projected that in 2027, cannabis sales will generate an additional $30.8 million for the state’s existing sales tax.

If the bill Walz signed last year to legalise THC edibles is enacted as planned, a new gross receipts tax of 15% will be imposed on the industry.

A Cannabis Management Office (CMO) is proposed to be set up in the budget to manage a legalised marijuana industry.

The Minnesota budget states, “The Governor recommends funding for the safe and responsible legalisation of cannabis for adults in Minnesota.” Furthermore, this proposal incorporates taxes on adult-use cannabis and includes funds for grants to help individuals enter the legal cannabis market. In addition, non-violent cannabis-related charges will be expunged.

Cannabis prohibition in Minnesota has failed. Even though it’s illegal right now, a lot of people in Minnesota smoke weed. If cannabis usage is legalised for adults, the black market will be replaced by a system of regulations analogous to those already approved for the sale of alcohol.

Millions of dollars are proposed to be distributed among the several governmental entities involved in the legalisation process in the proposed budget. The bill allocates $822,000 to the USDA for “food safety and pesticide enforcement lab testing and rulemaking relating to changes in cannabis laws” in Fiscal Years 2024 and 2025.

The governor is also requesting $921k for CMO in the coming fiscal year and $844k in 2025 to establish a Cannabis Expungement Board.

When Walz’s broader legalisation proposal passes, it will “automatically seal dismissals, exonerations, convictions, or stayed sentences of a petty misdemeanour and misdemeanour marijuana offences by the Bureau of Criminal Apprehension, which will provide notice of the expungement to local law enforcement agencies and the Judicial Branch for compliance purposes.”

Legislators have been proposing legalisation legislation that would include both the OCM and an expungement board.

According to Walz’s proposed budget, the expungement board will aid in this effort by looking at “additional cannabis convictions to consider eligibility for expungement or resentencing.”

According to the plan, “the expungement of nonviolent marijuana charges is a first step in addressing the inequities the current system of marijuana prohibition has generated.” The Office of Cannabis Management will establish a Division of Social Equity to ensure that underrepresented groups are included in the process of creating and enforcing cannabis laws.

In addition, “social equity applicants must be given preference in the selection of cannabis licences and in the cannabis grower and industry training and navigation award programmes,” the proposal reads.

Five per cent of the proceeds from the marijuana tax would be allocated to a treatment advisory board for substance abuse.

The governor requested funds for legalising implementation in his latest executive budget, but lawmakers were unable to pass the policy.

A legalisation bill was presented in both chambers earlier this month, and this new budget development coincides with committee activity on the bill.

Several committees in the House have already given the bill their OK, and on Wednesday, a Senate committee will hear the bill’s companion.

Officials from the Democratic-Farmer-Labor party are optimistic that legalisation will be enacted this session, as their party has a majority in both the House and Senate and controls the governorship.

Former House Majority Leader and current MN are Ready Campaign Chair Ryan Winkler (D) authored the legislation that was eventually passed by the lower chamber in 2021. Last month, the organisation declared that it would be lobbying in favour of the proposal and conducting a grass-roots push to gain support for reform.

For his part, Walz has sent out an email blast this month encouraging people to sign a petition in favour of legalising marijuana to join lawmakers and the administration in their campaign to do so this session.

Immediately following their November election victory, Democrats agreed to hold an internal discussion on the matter.

The Democratic leader in the House, Melissa Hortman, has said that she anticipates cannabis reform to be included in the governor’s budget request, while she has also said that it “will take a long time” to get through the legislature.

While Walz recently predicted that progress on the matter would be made “by May,” Hortman has indicated that it may not be resolved until the following legislative session.

Earlier this month, Winkler agreed with the governor, telling Marijuana Moment that “it seems likely that [passing legalisation] will be done by May.”

Since the legislature ends its session at the end of May, he explained, “if they don’t accomplish it in that timeline, it’ll take another full year”; he added, “I don’t think anything will be enhanced or bettered by waiting.” Everyone stands to benefit from the passage of this bill.

The majority of Minnesotans, according to two surveys published in September, are in favour of legalising marijuana for recreational use, and an even larger majority, according to another poll, supports the state’s decision to allow THC-infused edibles, which was passed earlier this year.

Also in September, results from a survey performed by House staff during the State Fair were made public, showing widespread support for legalisation. Sixty-one per cent of respondents to a poll commissioned by the Minnesota legislature expressed support for making cannabis available to adults.

When the House Public Information Services polled fairgoers in 2021, just 58% said they supported the idea. A majority of Americans (56% according to a 2019 House poll) favour legalisation.

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