Minnesota marijuana license lottery fight heads to state appeals court – InForum

ST. PAUL — A case challenging how the Minnesota Office of Cannabis Management handles social equity license applications is headed to the state Court of Appeals.

The court on Wednesday ordered the state regulator to provide more information about the process it uses to decide who moves forward. The judicial process will determine whether the lottery can be rescheduled to determine who gets pre-approved to run a marijuana business once the legal market launches and how that might happen.

A district court judge halted the lottery indefinitely after rejected applicants filed a lawsuit. Ramsey County District Court Judge Stephen Smith did not rule on the merits of the case and appealed the matter to a higher court.

One of those applicants, Cristina Aranguiz, filed papers with the Court of Appeals on Tuesday after the Office of Marijuana Management denied her application. The social equality lottery aimed to support people living in high-poverty areas, those harmed by the war on drugs and veterans.

Aranguiz is a first-generation Latino entrepreneur and said he meets the criteria set by the state. But Aranguiz’s lawyers wrote in their court filing that the office’s decision to reject him “violated the legislature’s marijuana regulations, was arbitrary and capricious, and was an abuse of discretion.”

More than 1,500 people have applied for social equity marijuana licenses, the agency said. And in the lottery scheduled for Tuesday, this number would be reduced to 282.

But on Monday, Ramsey County District Court Judge Stephen Smith sided with a group of applicants, including Aranguiz, who were denied access to the social equity pre-approval lottery. They filed the lawsuit over a process they argued lacked clear criteria and left no room for appeal.

The Office of Marijuana Management has defended its process, saying it seeks to eliminate applicants looking to make a quick profit rather than building legitimate businesses. Authorities argued that Aranguiz and others had connections to larger businesses that then had the option to purchase social equity licenses, bypassing the licensing system to gain a market advantage in Minnesota.

Many applicants, including Aranguiz, said the statement mischaracterized agreements with other businesses in the cannabis market.

In a written statement following the decision, the office said the regulator was “committed to launching a fair, sustainable and responsible adult cannabis market.”

State lawmakers legalized marijuana for adult recreational use in 2023, but retail marketplace establishment has moved slowly. No licenses have been issued to commercial growers or sellers ahead of the launch, which is expected to begin in early 2025.

People can grow their own marijuana and distribute it in small quantities. Native American tribes have also opened their own stores, but these sales are limited to reservations.

This story was first published on MPRNews.org.