Making Business Changes

Minnesota law only allows for licenses—not applications—to be transferred. However, the prohibition on pre-licensure transfer does not mean that an applicant cannot make changes to their ownership structure. There are different requirements for changing ownership of a business, depending on if the changes are being made prior to obtaining a cannabis business license, or if they are being made after a license has been issued.

Applicants (Before Licensure)

By statute, applicants cannot transfer ownership of their application before receiving a license. This means that an applicant cannot sell the majority ownership interest to a third party or cause changes to the individual holding majority control.

However, qualified and preliminarily approved applicants can make changes to their ownership structure in the application before receiving a license, so long as they do not do any of the following:

• Make any transfer of an ownership interest that changes the individual that holds a majority ownership interest of the cannabis business
• Make changes that would require a new business registration with the Minnesota Secretary of State, transfer to a different business entity, or change the business structure
• In the case of a social equity classified application, make any transfer of ownership that reduces social equity ownership below 65%
• Add any owners that are ineligible to hold a cannabis license based on the background check disqualification process
• Create any ownership structure that is in violation of the true party of interest provisions (Minnesota Statutes, section 342.185)

Note that it is the applicant’s responsibility to report any ownership or control changes to OCM once the changes are executed and maintain compliance with ownership structure requirements in Minnesota Statutes, sections 342.12, 342.14, 342.15, 342.16, 342.17, and 342.185. Failure to do so will result in your application not proceeding. OCM will not provide prior written approval for these types of changes.

Active License Holders

An active license holder has two options for changing ownership of their business.

1. Adding additional owners/changing existing owners. License holders may add new owners or adjust their ownership percentages but must report changes to OCM once executed. This is for changes that do not result in a change in the person who holds the majority in the cannabis business. Similar to pre-licensure, OCM will not provide prior written approval for these changes and it is the responsibility of the license holder to maintain compliance with all applicable regulations.
2. Transferring the license. A transfer is when there is a change to the individual who holds the majority share. This can include, but is not limited to, changes within an existing ownership group, a new individual being added to an existing ownership group, or the full sale of the business to a new owner. Transfers also include moving a license from one entity to another entity even if both entities have the same ownership. A license holder can transfer their license, pursuant to section 342.12, with prior written approval of OCM and subject to the following requirements:
   • Licenses classified as social equity require review and approval by the Division of Social Equity.
   • Licenses with a social equity classification may only be transferred to another verified social equity individual or ownership group (at least 65% owned by verified social equity individuals) during the first three years of operations. After three years, a social equity license can be transferred to any entity, including a non-social equity ownership group, subject to review and approval by the Division of Social Equity.
   • You cannot make any change of ownership or control that cause the license holder's legal business structure to convert or change to a different type of legal business structure.
   • You cannot add or transfer to any owners that are ineligible to hold a cannabis license based on the background check disqualification process.
   • Transfers of licenses must comply with Minnesota's true party of interest requirements per Minnesota Statutes, section 342.185.

Notification of transfer alone does not constitute prior written approval. A license transferee cannot conduct any business related to the license until OCM has provided written approval for the transfer (section 342.12).

Notifying OCM of Ownership Changes 

To report ownership or control changes and to request prior written approval for a transfer, applicants and license holders must email requests to ocm.licensing@state.mn.us. Attach the following documents in the email:

• Completed Disclosure of Changes to Ownership and Control form
• Updated capitalization table
• Updated corporate documents, if applicable (e.g., articles of incorporation, bylaws, partnership agreements)
• Social equity verification of the new owner, if applicable
• Photo ID of the applicant, if not already on record at OCM

If the requested change includes new owners, state law requires a background check be performed. It is the applicant’s responsibility to initiate the process. Learn more about background checks. 

Ownership or control changes must be reported to OCM once executed. Transfers must receive prior written approval from the office. Both processes must comply with Minnesota Statutes, sections 342.12, 342.14, 342.15, 342.16, 342.17, and 342.185. Failure to comply may result in denial of the application or revocation of the license.

An applicant or license holder may wish to make changes to their business name during the application process or after a license has been issued. Changes to the business name may be permissible and must be submitted to OCM for review. Changes to an applicant’s or license holder’s business structure are not permitted.

Notifying OCM of Business Name Changes 

To request review of a business name change, applicants and license holders must email ocm.licensing@state.mn.us. Attach the following documents in the email:

• Completed Disclosure of Changes to Business Name form 
• Proof of trade name registration documentation (Certificate of Assumed Name) as provided by the Minnesota Secretary of State

It is the applicant’s or license holder’s responsibility to follow these requirements. Business name changes must be reported to OCM and comply with Minnesota Statutes, section 342.12. Failure to comply may result in withdrawal of the application or revocation of the license.

An applicant or license holder may need to update their contact information, such as email, phone number or mailing address, on record with OCM. Also, it may be necessary to update the authorized agent or a site contact. These changes may be permissible if submitted to OCM.

To request review of an update to the applicant's or license holder's general information, email ocm.licensing@state.mn.us. Attach the following document in the email:

• Completed Change of General Information Request form

The request will be reviewed and processed. If changes cannot be made, OCM will contact the submitter directly.

To make changes to endorsements and/or business activities, a licensed business must submit the request for review and approval to OCM before being effective. This is only for license holders.

Adding New Endorsements and/or Business Activities  as a License Holder

A licensed business may apply to add new endorsements and/or business activities to their license through Accela.

• As a first step, the license holder should submit a new site registration in Accela and upload an amended final plan of record which focuses only on the new endorsement and/or business activity to be added.
• Next, the license holder should email ocm.licensing@state.mn.us to inform OCM that updates have been made in Accela with the proposed changes.

All applications for new endorsements and/or business activities are subject to OCM review, approval, and inspection, as well as local approval of the new site registration. OCM will notify the license holder once/if new endorsements and/or business activities are approved.

Withdrawing Endorsements and/or Business Activities  as a License Holder

A licensed business may determine an endorsement and/or business activity is no longer relevant to their operations.

To withdraw an endorsement and/or business activity, email ocm.licensing@state.mn.us. Attach the following required document:

• Completed Site Modification and Inventory Management Plan form: This informs OCM how affected cannabis material and/or products on site will be managed.

OCM may inspect the site to confirm the endorsement and/or business activity can be terminated.

Any changes to a business location, including moving to a new location or permanently closing a site, must be submitted by the license holder to OCM for review and approval. The office may require a new site inspection and updated final plans of record prior to approval, and you may also need local government approval and a new retail registration.

To request a change of business location or to close a site, email ocm.licensing@state.mn.us. Attach the following required document:

• Completed Site Modification and Inventory Management Plan form