With Minnesota’s new cannabis regulations taking effect in 2025, CBD and hemp retailers are facing major licensing and compliance changes. Whether you sell hemp-derived products in your convenience store or run a full CBD wellness shop, you’re going to need to take action to remain compliant and operational.
To help you navigate the transition from Minnesota hemp registration to retail licensing, we’ve put together this FAQ-based guide that covers the most pressing questions for Minnesota hemp retailers, including key deadlines, hemp licensing steps, and how to prepare your business for the new requirements.
When Does Minnesota’s Hemp Retail Licensing Begin?
As of September 1, 2025, Minnesota’s hemp business registration window is closed. If you plan to continue selling hemp-derived THC products like gummies or beverages, you’ll need to apply for an official license through the Minnesota Office of Cannabis Management (OCM).
Minnesota Hemp Retailer Registration & Licensing Timeline
- June 2 - August 31, 2025: Final registration period for existing hemp businesses
- Fall 2025: OCM licensing applications open
- Fall/Winter 2025: OCM to begin issuing licenses under the new Chapter 342 rules
Who Needs to Apply For a Hemp License Under the New Law?
If your business sells or manufactures hemp-derived cannabinoid products, including edibles, beverages, tinctures, or topicals, you must apply for a license to continue operating, even if your business was previously hemp registered. This includes:
- CBD and wellness stores
- Liquor stores selling THC seltzers
- Grocery or convenience stores with THC drinks or edibles
- Bars or restaurants offering hemp THC beverages
- Manufacturers or wholesalers of hemp-derived products
Can I Convert My Hemp Registration to a License?
If your business was registered before April 14, 2025, you may qualify for conversion from hemp registration to licensure, allowing you to continue operating as your license is processed.
To qualify:
- You must apply during the licensing window in Fall 2025
- You must have been a registered operator before April 14, 2025
OCM will continue to allow existing registrants to operate under §151.72 until their new license is approved. Once licensed, all businesses must follow Chapter 342 regulations.
What Is the New Hemp Licensing Process for Retailers?
Here’s how Minnesota’s new lower-potency hemp edible retailer (LPHE-R) licensing process works:
Step 1: Apply to OCM
- Submit your license application and associated fees to the Office of Cannabis Management
- Indicate whether you want:
- A retailer endorsement
- A delivery endorsement
- Both
- Indicate whether you want optional endorsements:
- Edible cannabinoid handler
- On-site consumption
Step 2: Application Review
- OCM will review your submission and may perform a site inspection (Note: Prior inspections under the registration system may satisfy this requirement)
Step 3: OCM Issues License
- If approved, OCM issues your license and any endorsements you’ve requested
Step 4: Register with Local Government
- OCM will notify your local municipality
- You must submit a separate retail registration to your city or county
- Local government will review your application, check tax status, and may inspect your business
- You’ll pay a local retail registration fee (up to $125 per location)
- If approved, local authorities will issue your retail registration
Step 5: Begin Operations
Once you have both your state license from OCM and your local registration from your city or county, you may begin (or continue) retail sales under the new regulatory framework.
What Happens if I Don’t Apply for an LPHE-R License?
If you don’t apply for a license, you will not be able to legally sell hemp-derived THC products after Fall 2025. The consequences may include:
- Loss of legal sales rights
- Fines and penalties
- Product seizures
- Loss of customer trust
The state is cracking down on unlicensed operators. With hemp-derived THC drinks and edibles becoming increasingly mainstream in Minnesota, maintaining your license is key to continued success.
Do You Need a CBD & Hemp-Specific POS to Run Your Store?
The short answer is no; however, using a specialized POS tailored to the CBD industry provides significant advantages.
Why Use a CBD/Hemp-Specific POS?
- Integrated High-Risk Payment Processing: Standard payment processors like Square, PayPal, or Stripe frequently shut down accounts or hold funds due to CBD’s “high-risk” classification. A purpose-built point-of-sale partners with compliant, high-risk processors to:
- Reduce transaction errors
- Avoid frozen accounts
- Ensure uninterrupted payments
- Keep you compliant with banking regulations
- Build for Industry-Specific Workflows: Unlike generic retail systems, CBD & hemp POS systems support:
- Age verification
- Batch tracking
- CBD product fields to ensure proper tracking and reporting
- Integrated eCommerce tools
- Future-Proof for THC Expansion: Minnesota’s full adult-use THC licensing is on the horizon. A cannabis-ready POS like Cova ensures your system can evolve with you – so you won’t need to rip and replace everything once you introduce new products or apply for additional licenses.
Why Must My Payment Processor Support High-Risk Businesses?
CBD and hemp-derived THC are considered high-risk industries by most financial institutions. This is due to:
- Complex and evolving state laws
- Ongoing federal prohibition
- High chargeback rates
- Media scrutiny and legal ambiguity
Using a Cannabis and CBD payment processor equipped to handle high-risk businesses ensures:
- Fewer account shutdowns
- More favorable transaction fees
- Better chargeback protection
- Compliance-ready tools and documentation
Cova’s integrated payments platform is built specifically for CBD, hemp, and cannabis retailers, giving you reliable, industry-approved options for debit, credit, and ACH transactions.
What Should Minnesota Hemp Retailers Do to Prepare for Licensing?
Here’s a practical checklist to help ensure you’re prepared for hemp retail licensing in Minnesota.
Applying for a License in Fall 2025:
- Apply early to the OCM
- Decide which endorsements (retail, delivery, consumption, etc.) you want
- Prepare for a potential site visit
- Begin working with your local city or county for retail registration
Staying Compliant in 2026 and Beyond:
- Maintain documentation
- Respond to regulatory updates
- Keep all tech systems compliant with evolving rules
- Choose a partner like Cova that can help you adapt as Minnesota’s cannabis laws mature
How Will This Affect Minnesota Hemp Manufacturers and Distributors?
Manufacturers will also need to:
- Apply for a license
- Update all product packaging (QR codes no longer accepted)
- Comply with Chapter 342 manufacturing and wholesale rules
- Partner only with licensed retailers for distribution
If you’re a manufacturer and plan to expand into the adult-use cannabis supply chain in the future, this licensing process sets the foundation.
Is Your Tech Stack Ready?
Minnesota’s hemp licensing is just the beginning. As the state rolls out adult-use cannabis rules, it will become even more important for retailers to operate with:
- A cannabis-ready POS system
- Secure, high-risk payment processing
- Audit-ready compliance tools
- Real-time inventory tracking
- Scalable systems for multi-location growth
Cova’s hemp and cannabis retail platform is used in multiple fully legal states and provinces.
Final Thoughts
The days of casual hemp retail in Minnesota are ending. Licensing is coming fast – and retailers that fail to prepare risk losing access to one of the fastest-growing wellness product categories in the state. By getting your documents in order, understanding the licensing steps, and setting up the right technology now, you’ll be ready to thrive under the new rules. And with Cova as your partner, you’ll have the peace of mind that your POS, payments, and compliance are all covered. Want to see Cova in action and learn exactly how it can help with your Minnesota retail hemp business? Book a free demo right here!