Compacts

In establishing Minnesota’s cannabis law, the Legislature called on the governor to negotiate intergovernmental agreements—cannabis compacts—with Tribal Nations sharing territory with Minnesota to promote a cooperative and mutually beneficial relationship between the state and Tribes that enhances public health and safety, ensures a lawful and well-regulated cannabis market, encourages economic development, and provides financial benefits to both the state and Tribal Nations (Minnesota Statutes, section 3.9228).

Tribal-state cannabis compacts address jurisdictional issues related to the medical cannabis and adult-use cannabis industries and create a legal agreement between the state and Tribal Nation, establishing the terms and conditions to regulate the operation of Tribal cannabis businesses off Tribally regulated lands.

Compacting negotiations between the State of Minnesota and Tribal Nations are non-public data while they are ongoing. Under Minnesota Statutes, section 3.9228, subdivision 5, once executed, compacts are publicly accessible below.

A model for multi-jurisdictional cannabis markets

Each Tribal-state cannabis compact is unique and constitutes a separate agreement between the state and each individual Tribe. Though the terms vary in accordance with the needs of the individual Tribe, the compacts have some fundamental similarities. Tribal Nations entering into cannabis compacts with the state have established Tribal regulatory agencies that will license Tribal enterprises and oversee enforcement of the Tribe’s civil regulatory cannabis program using standards that meet or exceed those established by OCM.

Off-reservation Tribal enterprises and local control

A Tribal nation may open up to eight off-reservation cannabis retail locations. They are limited to one retail location per city and three per county. Tribally regulated retail locations off Tribal land must follow all non-cannabis-specific local ordinances, including zoning, land use, statutory setback limitations, and local hours of operation restrictions.

Under the rules governing Minnesota’s cannabis industry (Minnesota Rules, chapter 9810), local units of government may include in its count of active retail registrations any retail locations operating under a Tribal compact or a Tribally issued license or registration even though they do not receive local retail registration.

Visit OCM’s local governments webpage for more information about the role of local governments in the regulation of cannabis in Minnesota, including zoning compliance certification and local retail registration of state licensed businesses, as outlined in Minnesota Statutes, chapter 342.

Prioritizing public health and safety through product testing and tracking

The Tribal-state cannabis compacts require product testing to verify compliance with public health and safety standards set by OCM, ensuring uniformity across the state market. This includes cannabis products undergoing agreed upon testing for potency, stability, homogeneity, and contaminants at state-licensed testing labs before entering the state market. Cannabis products cultivated, manufactured or packaged for final sale within regulated lands of a Tribal Nation that enter the state market are also subject to the state’s surveillance testing program.

Until there are state-licensed testing facilities, cannabis products sold by Tribal enterprises will be tested by one of the two existing medical cannabis testing facilities in Minnesota using the state’s technical standards for sampling and testing cannabis products.

Like state-licensees, Tribes and their licensees will utilize seed-to-sale tracking to ensure that regulators can see the full lifecycle of a cannabis plant or product. All products must be entered into the state’s seed-to-sale system when they move off Tribal lands. 

Packaging and labeling

Cannabis products sold into the state market from Tribal cultivators, manufacturers or retailers must meet all packaging and labeling requirements outlined in state law and Office of Cannabis Management rules (Minnesota Rules, chapter 9810), including use of the universal cannabis symbol and required warning sticker. For more information, review the Packaging and Labeling Guide for Cannabis and Lower-Potency Hemp Edible Products.

Taxation of cannabis products

Each Tribal Nation will enter into a tax agreement with the Minnesota Department of Revenue (DOR) for sharing of sales and gross receipts tax collected from any Tribally owned cannabis businesses operating off-reservation.

Sales of cannabis products off Tribal lands are subject to all state and local taxes. The cannabis tax is 15% of gross receipts from retail sales of taxable cannabis products. In addition, taxable cannabis products are subject to both 6.875% state general rate sales tax, and any applicable local sales taxes based on where the transaction takes place.