It’s Tuesday night at Urban Growler in St. Paul, and a slew of local breweries and drink producers, a few state reps, some folks from the Office of Cannabis Management, and a handful of other entrepreneurs are meeting in a back room. There’s no shady dealing or nefarious networking going on here; they’re all posing for pics, talking shop, and drinking beers at the Minnesota Hemp Beverage Producers’ happy hour.
The main point of discussion at the gathering: whether or not the federal ban on hemp-derived beverages, gummies, tinctures, and other products will actually go into effect in November, or if there’s any hope for a workaround. The bill is supposed to stop dangerously unregulated hemp-derived products, but there’s an overreach, outlawing everything from 1 mg microdose candies sold at Marigold to the 5 mg seltzers at Fulton to… an untested 75 mg gummy sold at a gas station in Wyoming.
“You know, when Mitch McConnell stands on the Senate floor and holds up a bag of 100 mg Oreo gummies and says, ‘This is what we're banning!’ I’m like, ‘No, you're not,’” says Ryan Kopperud, VP of growth at Duluth-based Birdie, Wild State Cidery’s THC drink. “I mean, yes, you are, but you're swinging with a hatchet, and you're also banning the 2 mg seltzers that are in France 44 by my house. You know, like those are not even remotely in the same ballpark.”
Should the law be implemented as planned, it will effectively kill a $200 million industry in Minnesota.
The Fight to Survive
Despite the high drama from Mitch McConnell, it’s hardly Refer Madness here in Minnesota. THC is highly regulated, and the day-to-day life of a cannabis company is about applying for licenses, following regulations, sending product off for testing, and investing the time and resources needed to put out something that’s both legal and profitable. THC has been a key stream of revenue for breweries, liquor stores, and nightclubs since it was legalized in 2022, particularly as alcohol consumption declines. Back in November, reps from Utepils Brewing and Top Ten Liquors both told Fox 9 that hemp-derived drinks make up over 15% of their business.
That could all go away soon. Last year, Congress signed off on Farm Bill legislation that would make hemp-derived products illegal on November 12, 2026. Unless certain states get a carve out or the deadline is extended, many companies will cease to exist—up in smoke, so to speak.
“I'm just, I'm so sad for these Minnesota hemp THC companies who have jumped in and made a beautiful industry out of nothing,” says Jen Randolph Reise, a lawyer-turned-consultant who founded Minneapolis-based Northstar Cannabis Consulting to help entrepreneurs navigate the complexities of operating a weed shop. “And they've already been pivoting and trying to figure out how to be compliant every three to six months.”
There are a few glimmers of hope and, oddly enough, they all hinge on bipartisan efforts. Back in November of 2025, Sens. Amy Klobuchar (D-MN) and Rand Paul (R-KY) introduced the Hemp Safety Enforcement Act. If passed, it would allow states to opt out of federal bans and regulate hemp-derived products—as long as safety and age restrictions are in place, something states that have legalized THC have already implemented.
Meanwhile a similar bill, the Hemp Enforcement, Modernization, and Protection (HEMP) Act, from Reps. Morgan Griffith (R-VA) and Marc Veasey (D-TX), is currently making its way through the House. This bill would further regulate things like dosage, packaging, age restrictions, and codify manufacturing protocols for these types of cannabinoids rather than outright ban them.
There are other possible bills, amendments, and delays on the table, but until something actually happens—and it’s gotta be soon—the legality of many currently operating businesses stays in limbo.
“Right now we're scared. It's been months since that law was introduced, and November's coming up quick,” says Kelly Sander, who started his hemp-derived beverage company, Richfield-based Ganja Skoden, with two friends in 2024. “Things in the government are slow, right? If it doesn't get fast-tracked we're out of business; we're illegal.”
“This isn't like, ‘Oh, Congress has five months to figure this out,’” says Josh Fellman, co-founder of Minneapolis's Flipside Dispensary. “Congress has, like, 60 days to figure this out before it really starts to affect the market negatively. Companies need to manufacture, they need to package, they need to ship. Realistically, if this isn't finished by July, I think that there's going to be a wind down of a lot of hemp products.”
Even if Congress votes to allow state-by-state regulation, which many consider a best-case scenario, it would still be killing interstate commerce, another lucrative aspect of the industry. Minnesota drink manufacturers wouldn’t be able to ship their products to Iowa, for example.
On the plus side, for Minnesota businesses near the state border, this could be a boon. Just as Wisconsin liquor shops used to sell booze to Minnesotans on Sundays, where there’s a will (and a car driving east down I-94) consumers will find a way.
“I have a client close to the border between both Dakotas, and he says he thinks 60% of his business is folks from the Dakotas driving over the border to buy legal cannabis,” Reise says. “We are surrounded by illegal states, so businesses are excited to get those tax revenues coming into Minnesota.”
While the fight to stay legal is the most dire obstacle hemp-derived manufacturers are facing these days, that's certainly not the only challenge. Like many businesses in town, Minnesota weed purveyors are also still dealing with the repercussions of Operation Metro Surge.
“It's been a difficult start of the year for Ganja Skoden, along with a lot of places, just because of the state of Minnesota,” Kelly says. “Being a Black- and Indigenous- and immigrant-owned company, we were really apprehensive to be on the streets for two or three months out of the beginning of the year.”
Like restaurants, entertainment venues, and grocers in town, some gummy and beverage sellers saw a drop in business last winter.
“People weren’t going out,” Kelly continues. “And that's something that we've always thrived on: being part of the community. We haven't been able to do that. It's definitely been highly impactful for us.”
Others say they’ve managed to keep things going despite the high-stress situation.
“The neighborhood was definitely on alert,” Fellman says. “But in recessions or in times of economic downturn, people drink more, right? I think during Operation Metro Surge what we saw was a lot of people were coming to us to buy products to help them relax when things were tense.”
Then there’s testing, something that’s impacting every aspect of the cannabis industry. Before hitting the market, every hemp-derived product (and every other kind of THC product in the state) must be tested at an accredited Minnesota lab for things like potency, metals, and microbial contaminates. That’s great news for consumer safety and confidence. The problem? There are only three such facilities in Minnesota. In the next few months that number will likely grow to five, but that still makes for an insane workload potentially impacting thousands of products in Minnesota.
In an effort to avoid a bottleneck, state legislators made provisions to allow manufacturers to send their stuff to accredited facilities outside of Minnesota through January 2026. When it became clear that the testing issue wasn’t improving anytime soon, that deadline was extended to May 31, 2027.
Labs are expensive endeavors, and the looming federal ban makes for a huge risk for companies that otherwise might consider opening a facility, plus stepping into the THC world can impact how a company does business in other sectors.
“And a lot of those larger entities are not jumping into the cannabis industry at all because they have other interests, including federal grants and federal licenses that they're worried will be threatened by also being in the cannabis industry,” Reise says.
Still, business carries on. The OCM continues to sift through retail applicants looking to open up shop, and major big-box companies have begun seeking a piece of the pie. Just this past April, Target applied for a license to sell hemp-derived products at all of its Minnesota stores.
The Fall of Flower
While the hemp-derived industry faces growing pains and big questions about its future, recreational marijuana may finally be coming into bloom. Yeah, yeah, yeah, we’ve heard this all before. But cultivators and shop owners mean it this time.
“I really do think this fall—like September, October, November—we're going to see a really large influx of really highly curated flower and really good recreational products that are going to start hitting shelves from small curators to big curators,” Fellman says. “I don't think prices necessarily are going to get a lot better until next spring, but at least this fall, we should have a much better idea of what this rec market looks like on a day to day basis.”
It’s been a long, slow road to even get to this point. Minnesota's Tribal nations, which were able to move swiftly and regulate their own THC rollout, were first to offer flower. Medical marijuana companies were also given a jump-start when the state permitted recreational sales at Rise and Green Goods last September. The equity lottery that was supposed to help BIPOC-run businesses get an early start? That was a disastrous waste of time.
Meanwhile, independent dispensaries have struggled to get product—any product—on the shelf. Cultivators needed time to get licensing, set up shop, and grow their products with consistency. That led shoppers to wonder for over three years when weed would actually become available.
“Customers are popping into shops and going, ‘Where's the flower? Where's the full potency?’ And it doesn't exist, because there's just not enough of the supply cultivation,” says Tess Fellman, co-founder of Flipside Dispensary, on why their shop hasn’t made the full switch to flower yet. “We've been really lucky that we can trickle things in and our customers are willing to be patient with us, whereas some places are opening from scratch.”
There’s also a lack of transportation options, as a special license is required to get these types of products from point A to B. And yes, the dearth of in-state testing sites is also causing a major traffic jam on the road to recreational green. That’s a big problem; marijuana isn’t exactly the kind of crop that sits well on the shelf.
“If the testing facilities don't have their stuff worked out, what's going to happen is businesses are going to end up eating a bunch of that product,” Tess says. “That's going to really, really hinder the market as well.”
But at long last, the wait for honest-to-god smokeable weed, not just the stuff from your backyard dealer or weird brother-in-law, could be over very soon.
“I think the summer consumers are going to start having not just a choice of independent dispensaries, but a choice of products from craft cultivators at our independent dispensaries,” says Reise, who's working with about 20 businesses via her North Star accelerator program. “So if you've gone to a dispensary and bought an ounce for $70 that was pretty mid, it's gonna improve.”
With so much choice suddenly becoming available, there will also be a learning curve for consumers. But at least it will be a fun hill to climb. Imagine stores being able to sell “flower flights” similar to a beer sampler pack. There’s also something called “deli style” shopping, which allows stores to keep supplies in unpackaged containers so customers can see and smell the product before purchasing, like a scented “tester” candle. So far, places like Twin Cities High in St. Paul, Flame & Flora in Prior Lake, and Strains of the Earth in Jordan are offering “deli style” options.
“It can really help you pick exactly what you want and feel confident about that quality,” Reise says. “When we buy presealed little bags we tend to choose based on things like how fun the strain name is. Some entrepreneurs and the OCM have worked together to find a route to do deli-style, and I'm really happy to see that.”
Seeds, Seeds, Seeds!
While businesses fret over legality and the supply chain, there’s one component of the cannabis industry that is often overlooked: homegrowers. And now that it's totally A-OK for hobby stoners to grow up to eight plants for personal use, the chillest sector of weed is emerging from the smoke and joining the party.
“For so long, home growers sat by themselves in their basements and their garages and had no one to talk to, no one to share experiences with or get advice,” Bob Walloch says. In 2023 he and his partner, Erin Walloch, opened CannaJoyMN. The south Minneapolis shop began as a hemp-derived retailer, but thanks to new licensing going through in March, it’s now shifting into a full dispensary, cultivating strains up north and selling seedlings in store.
For them, education and the ability to share knowledge is key. In-store gatherings are a regular occurrence, with CannaJoy hosting over 100 events annually, from puff painting to yoga sessions, most of which are free. Bob also organizes classes and workshops, as well as regular meetups to help home growers learn how to get started in their backyard.
“Meeting people where they're at on their weed and seed journeys is really fun, and the events are just a great way for us to finally come together after all these years of prohibition,” Erin says.
“And it's really hard to get quality genetics and seed stock, even online,” continues Bob, explaining the importance of in-person knowledge sharing. “There's so many choices. It's hard to sort through and say, ‘Well, what's going to work for me?’”
For homegrowers who are overwhelmed with the idea of harvesting, CannaJoy hopes to be able to help with that with processing, too.
“I think all too often people grow outside and they say, ‘OK, now what do I do?’ It's really a challenge for home growers to be able to harvest well, and then to do something with it,” Bob says. “Much like many deer hunters take their harvest to someone to make products out of it, we're hoping to do the same for home growers this fall.”
Is It Gonna Be OK?
Despite some obstacles, traffic jams, and new bans that could set entrepreneurs back to zero, there is still an overwhelming sense of positivity.
“We're literally growing with the plant,” Erin Walloch says. “And you can't rush the plant right? It has to go through every phase. It certainly has felt like we've gone through every phase since we've started, both in those challenges and successes. But we've, you know, we've learned every step of the way.”
“We're just so focused on staying community based, and offering different products to customers,” says Josh Fellman at Flipside. “And as we get into this, this new market we're just really excited about where, where that is at, and where we're all headed.”
“We're looking forward to the future,” says Ganja Skoden’s Kelly Sander. “We're doing our thing out in the community, spreading one love and accepting everyone—we're full steam ahead.”
