For years, Minnesota's hemp industry thrived under the protections of the 2018 Farm Bill, which legalized hemp and its derivatives nationwide, as long as they contained less than 0.3% Delta-9 THC on a dry weight basis. Small businesses like Nothing But Hemp operated legally, selling what the Minnesota government now calls "Hemp Consumer Products." However, the recent regulatory shift in Minnesota has created a devastating scenario—one where hemp businesses are left with only two options: limit their business or run a federally illegal business.
The Rise and Fall of Minnesota’s Hemp Market
From 2018 to 2021, hemp businesses across the state operated within the boundaries of both state and federal law, offering a variety of hemp-derived products, including tinctures, topicals, smokable flower, and other cannabinoids, all compliant with the 2018 Farm Bill. But in 2022, Minnesota passed its low-dose THC law, limiting hemp businesses to only selling low-dose edibles and beverages—effectively ripping away half of the products they were legally selling just months before.
Regulators justified this move under the guise of safety. Steven Brown, CEO of Nothing But Hemp and former president of the Minnesota Hemp Association, worked tirelessly to advocate for the hemp industry. "We were pushed against the wall and told if we did not agree on getting rid of hemp vapes for safety, hemp flower, the government was going to shut down hemp businesses, so we agreed with the terms," Brown stated. "We had no choice."
However, these supposed safety concerns have proven to be nothing more than an excuse for market consolidation. While adult-use (AU) cannabis license holders are now granted the ability to sell a wider range of hemp-derived THC products, the very businesses that pioneered Minnesota’s hemp market are left stranded. Despite still being regulated under the Office of Cannabis Management (OCM), with strict packaging and age-gating requirements, hemp businesses are restricted from selling products that remain federally legal.
The Microbusiness Trap: A False Choice for Hemp Companies
Minnesota offers a microbusiness license, but it comes with a significant limitation: a business can only have one location to sell hemp consumer products. However, a hemp business cannot hold both a microbusiness license and a hemp business license simultaneously. This means that hemp businesses operating multiple locations have no viable path to selling their full range of federally legal hemp products. They must either:
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Stay a hemp business, which restricts them to selling only low-dose hemp edibles and beverages across multiple locations while losing access to selling hemp tinctures, hemp vapes, and smokable hemp flower.
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Apply for a microbusiness license, allowing them to sell all hemp consumer products, vapes, higher dose hemp products, hemp tinctures), but only at a single location, while forfeiting their ability to operate multiple stores.
This regulation makes it nearly impossible for hemp businesses to scale or operate efficiently. If a business has grown beyond a single retail location, it is now forced to choose between significantly limiting its product offerings or drastically downsizing to a single storefront. This restriction stifles expansion and creates an unfair burden on businesses that have already invested in growing their presence across the state.
This regulation makes it nearly impossible for hemp businesses to scale. If a business has grown beyond a single retail location, it must now either shrink its product offerings across all stores or consolidate its entire product line into just one storefront. This restriction stifles expansion and creates an unfair burden on businesses that have already invested in growing their presence across the state.
The Contradiction in Safety Concerns
In 2022, Minnesota regulators justified these new restrictions by claiming that higher-dose THC products, vapes, tinctures, and smokable hemp flower were unsafe. They used this rationale to strip these products from the hemp industry. Yet, those same products are now fully available for sale under AU licenses.
If vapes, tinctures, and hemp flower were deemed unsafe just two years ago, why are they now considered safe for AU license holders? Both industries fall under the same regulatory body, the OCM, and must adhere to similar packaging and age-gating rules. The inconsistency in these regulations raises serious concerns about whether this was truly a public safety issue or merely an attempt to shift control of the market away from small hemp businesses and toward the AU cannabis industry.
This hypocrisy is glaring. The state took away products that hemp businesses legally sold for years and handed them to AU licensees, creating an uneven marketplace. The government cannot claim these products are unsafe in one context while allowing their widespread sale in another. This move was never about safety—it was about control and market consolidation.
The Injustice of Forcing AU Licenses on Hemp Businesses
Another significant burden placed on hemp businesses is the restriction on direct imports. Under Minnesota’s new regulations, hemp businesses will not be able to directly import products into the state. Instead, all products must go through the METRC system—a costly and unnecessary requirement that drives up expenses and limits product availability. These are federally legal products, yet Minnesota has chosen to impose a state-controlled tracking system that adds an extra layer of bureaucracy, ultimately increasing costs for consumers and restricting market access.
Minnesota’s decision to corral hemp businesses into the low-dose market isn’t just an oversight—it’s an existential threat. The government has made it clear that the only way hemp businesses can sell their original product lines is by obtaining an adult-use cannabis license. But here’s the problem: these licenses are limited, expensive, and require compliance with an entirely different regulatory framework that many small hemp businesses can’t afford or don’t qualify for.
Forcing hemp businesses into the adult-use cannabis market is an unjustifiable move that directly contradicts federal law. Minnesota has effectively banned the sale of key hemp products by hemp businesses, despite their federal legality. They have banned tinctures—the backbone of the hemp industry—from being sold by hemp businesses, removed hemp flower from the market, which has significantly harmed local hemp farmers, and prohibited hemp vapes. Yet, these same products are now fully available for sale under AU licenses. This creates a situation where:
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Hemp companies can only sell low-dose products – limiting their revenue and ability to compete.
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AU license holders can sell the same products plus more – giving them a competitive advantage.
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Hemp companies looking to remain competitive must either limit their business growth or attempt to enter the AU market – leaving them in an impossible position.
The Collapse of Minnesota’s Small Hemp Businesses
The impact of this regulation is already visible. Established hemp businesses—companies that followed the rules and built their operations under the state’s original hemp laws—are now closing their doors. House of Oilwrox, one of the best small business operators in Minnesota’s hemp space have been forced out, victims of a government-created bottleneck that benefits large cannabis corporations while suffocating small businesses.
These businesses weren’t just selling products—they were part of a movement. They educated consumers, advocated for responsible cannabis reform, and helped normalize hemp-based wellness. But instead of being rewarded for their contributions, they’ve been cast aside, left with a shrinking market and an impossible choice: give up, severely limit their operations, or attempt to obtain an AU license that many will never get.
The Path Forward: Giving Small Hemp Businesses a Lane
The solution is clear: Minnesota must provide a sustainable and legal path for hemp businesses to sell the full range of federally legal hemp-derived products. That means:
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Restoring the ability for hemp businesses to sell Farm Bill-compliant products – including tinctures, topicals, and smokable flower, which remain legal under federal law.
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Creating a fair and distinct regulatory framework for hemp businesses – separate from the adult-use market, but with reasonable safety and packaging regulations.
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Recognizing that hemp businesses played a critical role in the success of Minnesota’s cannabis market – and ensuring they aren’t shut out of the future.
The state’s current regulations are not only unfair but also counterproductive. They stifle entrepreneurship, limit consumer choice, and create unnecessary economic hardship for businesses that have done everything by the book.
If Minnesota continues down this path, more small hemp businesses will close, and the state will be left with a cannabis market dominated by a few large players. The government must act now to correct this mistake and provide hemp businesses with the lane they need to operate legally, sustainably, and competitively.
Final Thoughts
Minnesota’s hemp businesses deserve a fair chance to thrive. They should not be forced to choose between restricting their growth or navigating a system designed for the adult-use market. Hemp and marijuana are distinct industries, and Minnesota must implement regulations that support both—without sidelining the small businesses that helped build the state’s cannabis market.
The time for change is now. If Minnesota truly values small businesses and consumer choice, it must address these regulatory barriers before more businesses are forced to shut down.
Nothing But Hemp is fortunate to be diversified and vertically integrated, which allows us to remain strong. But many of our colleagues are struggling, and that’s not fair. Without this structure, we too would be facing closure. It’s time for Minnesota to create a balanced path forward—one that ensures all hemp businesses have the opportunity to succeed.
