Minnesota Hemp Industry – Business Plan Templates

Key Takeaways

Hemp Industry Regulations currently in force:
- Hemp: Minnesota State Hemp Plan
- Hemp-Derived Cannabinoids: Chapter 342
Licenses available:
- Hemp Grower (to cultivate hemp and harvest hemp plants, plant parts, grain or seed)
- Hemp Processor (to convert raw hemp into hemp products)
- Hemp businesses wishing to perform certain activities with hemp edibles and beverages must obtain the following licenses, as applicable:
  - Lower-potency Hemp Edible Manufacturer (to create, package and label lower-potency hemp products as well as sell them to cannabis businesses)
  - Lower-potency Hemp Edible Retail (to sell packaged lower-potency hemp edibles to consumers)
  - Lower-potency Hemp Edible Wholesale (to buy lower-potency hemp edibles from cannabis and hemp businesses for sale to other cannabis and hemp businesses)
Products legal: In Minnesota, all hemp products with less than 0.3% THC are legal, except products intended to be consumed by combustion or vaporization. Hemp-derived CBD edibles are legal provided that:
- Edibles contain no more than 5mg of hemp-derived THC per serving and there is no more than 50mg of hemp-derived THC per package.
- Beverages contain a maximum of two servings with no more than 5mg of hemp-derived THC per serving for a total of 10mg per package.
Taxes:
- Effective July 1, 2025, Minnesota raised the cannabis tax on the retail price of hemp-derived CBD edibles to 15%. The 15% tax is in addition to the 6.875% state general rate sales tax and other applicable local sales taxes.
Market:
- Minnesota’s 132 licensed hemp growers planted 2,070 acres of hemp outdoors in 2024 – 148% up from 2023 – and harvested 1,970 acres. Around half of the acreage was grown for grain, making Minnesota the state with the largest amount of acres planted for grain production.
- The total tax revenue collected from July 2023 to May 2024 surpassed $10 million with average monthly collections of $900,000. But monthly tax collections during 2024 were on average well over $1 million which resulted in hemp consumable product sales to be estimated at $130 million in 2024.
- According to business owners and elected officials, the Minnesota hemp-derived THC market now generates approximately $200 million in annual sales. Some market participants believe that Minnesota’s hemp-derived beverage market alone is worth nearly $100 million.
- As of August 31, 2025, 5,380 hemp businesses were registered with the OCM. Since the application window for lower-potency hemp edible (LPHE) licenses opened, OCM has received 2,009 applications for LPHE retailers, 119 applications for LPHE manufacturers, and 94 applications for LPHE wholesalers.

Jump to:

Minnesota Hemp Legalization

Following the introduction of the 2014 Farm Bill, the Minnesota Industrial Hemp Development Act (Minnesota Statutes 18K) became law in 2015. Through this law, the Minnesota Department of Agriculture (MDA) created a hemp pilot program which operated from 2016 to 2020.

On October 31, 2019, the USDA released the Interim Final Rule (7 CFR part 990), which formed the regulatory framework for all hemp cultivation nationwide. The Minnesota State Plan was approved in July 2020 and became effective January 1, 2021.

On January 15, 2021, the USDA released the Final Rule (86 FR 5596). Following this, Minnesota’s hemp plan was revised to incorporate the federal Final Rule. The revised Minnesota State Hemp Plan was approved by the USDA and became effective on May 6, 2021. During the 2023 legislative session, several changes were made to the state’s statutes, and these changes have been incorporated into the updated hemp state plan linked above.

The MDA regulates industrial hemp cultivation and processing. All individuals or businesses that wish to grow, process, research, or test hemp, must obtain an MDA Hemp Program license.

In June 2022, House File 4065 legalized the sale of hemp-derived THC products, containing less than 0.3% THC, in grocery and convenience stores to individuals older than 21. Hemp-derived THC edibles can contain no more than 5mg of hemp-derived THC per serving and there is a maximum limit of 50mg of hemp-derived THC per package. Hemp-derived THC beverages can contain no more than 5mg of hemp-derived THC per serving for a total of 10mg per package. This law came into effect on July 1, 2022.

In May 2023, Minnesota legalized adult-use cannabis through House File 100 which also introduced some changes for the hemp-derived CBD market. The law required sellers of hemp-derived CBD products to register with the Office of Cannabis Management (OCM) by October 1, 2023. From July 1, 2023, edible CBD products are subject to a 10% Cannabis Tax. Starting from July 1, 2025, the Cannabis Tax was raised to 15%. Non-intoxicating topical CBD products are not subject to the Cannabis Tax. Additional restrictions are imposed on hemp-derived CBD products:

- - Beverages can contain a maximum of two servings per container.
  - Hemp-derived CBD products cannot contain any artificially derived cannabinoids except delta-8 and delta-9 THC.
  - Hemp-derived CBD products cannot contain any synthetic cannabinoids.
  - Non-intoxicating topical CBD products intended for consumption through inhalation, ingestion or injection are prohibited.

On March 1, 2025, regulatory authority for hemp-derived products was moved from Minnesota’s Board of Pharmacy to the Office of Cannabis Management (OCM). Chapter 342 (codified adult-use cannabis law) created a new definition “lower-potency hemp edible” which is any product that:

- - Is intended to be eaten or consumed as a beverage by humans.
  - Contains hemp concentrate or an artificially derived cannabinoid as well as food ingredients.
  - Consists of servings with no more than 5mg of delta-9 THC per serving, 25 mg of cannabidiol, 25mg of cannabigerol or a combination of these ingredients that does not exceed the limits established.
  - Does not contain more than a total of 0.5mg of all other cannabinoids per serving.
  - Does not contain an artificially derived cannabinoid except for delta-9 THC.
  - Does not contain a cannabinoid derived from cannabis plants or cannabis flower.

Only individuals aged 21 and older can purchase lower-potency hemp edibles. Three new licenses were created: lower-potency hemp edible manufacturer, lower-potency hemp edible retailer, and lower-potency hemp edible wholesale. Additionally, there are several endorsements that licensed lower-potency hemp edible businesses can obtain.

On October 1, 2025, the OCM opened the application window for lower-potency hemp businesses and all hemp businesses holding a registration will need to convert their registration to the relevant license. Existing hemp registrants are able to continue to sell hemp-derived CBD products as they wait for their official license.

From January 1, 2026, all licensed hemp businesses must test their products in accordance with the Cannabis Technical Authority and by a testing facility located in Minnesota and licensed by OCM.

What Types of Hemp Products are Legal in Minnesota

All hemp products (except products intended to be consumed by combustion or vaporization) with less than 0.3% THC are legal for production and sale in Minnesota. Regarding hemp-derived CBD products: edibles, beverages or nonintoxicating topical products are allowed for production and sale but their sale is limited to individuals aged 21 and older only. They are also subject to restrictions on the amount of THC they contain:

- - Edibles can contain no more than 5mg of hemp-derived THC per serving and there is a maximum limit of 50mg of hemp-derived THC per package.
  - Beverages can contain a maximum of two servings with no more than 5mg of hemp-derived THC per serving for a total of 10mg per package.
  - Each serving may not contain more than 25mg CBD and 25mg CBG.
  - Each serving may not contain more than 0.5mg of all other non-intoxicating cannabinoids.

Hemp CBD Taxes In Minnesota

Effective July 1, 2023, Minnesota imposed a new 10% cannabis tax on the retail price of hemp-derived CBD edibles. The 10% tax is in addition to the 6.875% state general rate sales tax and other applicable local sales taxes.

Hemp Licenses and Registrations Available in Minnesota

Hemp grower and processor licenses are issued by the Minnesota Department of Agriculture. The Hemp-Derived Cannabinoid Products Business Registration is issued by the OCM and is valid until October 1, 2025, when the new regulations go into effect and the lower-potency hemp edible licenses have to be obtained – jump to lower-potency hemp edible licensing information.

[/vc_column_text][/vc_column][/vc_row]

Grower

A hemp grower license allows to cultivate hemp in order to harvest plants, plant parts, grain or seed.

- - License fee: $150
  - Additional fee per location: $250
  - Application processing charge: 5% of the license fee with a minimum charge of $5
  - License renewal fee: $150
  - License period: The license is valid until the last day of the calendar year in which the license was issued.

Processor

A hemp processor license allows to convert raw hemp into hemp concentrate or artificially derived cannabinoids, for sale to a lower-potency hemp edible manufacturer license holder.

- - License fee: $250
  - Additional fee per location: $250
  - Application processing charge: 5% of the license fee with a minimum charge of $5
  - License renewal fee: $250
  - License period: The license is valid until the last day of the calendar year in which the license was issued.

HDC Products Retailer

A hemp-derived cannabinoid products business registration allows to sell hemp-derived cannabinoid products.

- - Registration fee: none

Application and other requirements:

Growers and Processors
HDC Products Business Registration

Growers and Processors

Licensing process:

Submit a complete application along with a nonrefundable registration and inspection fee to the Commissioner of Agriculture.

Information required to be submitted with the application includes:

- - The applicant’s full name, business address, telephone number and e-mail address, if available. If the applicant is a business entity: the full business name, the main business location address, telephone number and the full name, title and e-mail address, if available, of each key participant of the entity.
  - A list of authorized representatives to be registered under the license.
  - The proposed acreage and indoor square footage to be planted, if applicable.
  - The legal description and geospatial location of any proposed registered area for cultivation or processing.
  - A map of the location for cultivation, showing the boundaries and dimensions of the location in acres or square feet, if applicable to the license type.
  - An official fingerprint card of the applicant must be submitted to the Bureau of Criminal Apprehension as well as a completed informed consent form authorizing the Commissioner of Agriculture to obtain the applicant’s criminal history report. The criminal history report must be dated no more than 60 days before the date of the application.

Note: An individual who has been convicted of a felony relating to a controlled substance, is ineligible to receive a hemp grower or processor license in the ten years following the date of conviction.

Renewal:

The licensee must pay a nonrefundable license renewal fee in order to renew their license.

Next steps for a Grower Licensee:

Once the license is obtained, the applicant is required to:

- - Report all plantings by variety to their local Farm Service Agency office.
  - Submit an FSA 578 form to the Farm Service Agency within 10 days after planting a hemp lot.
  - Within 10 days of submitting an FSA 578 report, the licensee must submit a planting report to the Commissioner of Agriculture.
  - Between 5 and 30 days before harvest, the licensee must submit a harvest report to the Commissioner of Agriculture, including a certificate of analysis for any hemp lot which demonstrates the THC levels of a representative sample of the hemp lot, collected within 30 days before the harvest date.

Next steps for a Processor Licensee:

The processor must:

- - Only acquire or process raw hemp grown within Minnesota that has a Fit for Commerce certificate issued by the MDA to the grower selling the raw hemp.
  - If the raw hemp is purchased from outside of Minnesota, the processor must keep a bill of lading, certificate of analysis and other documentation demonstrating that the hemp was sourced from an establishment approved by another state, tribal or federal program.

HDC Products Business Registration

Obtaining the registration:

Submit the registration form with an attestation of compliance and an affirmation that the registrant will operate in compliance with the law.

Lower-Potency Hemp Edible Licenses (Applicable from Fall 2025)

Under the new regulations of Minnesota Statutes, Chapter 342, all hemp businesses wishing to manufacture, engage in wholesale or retail sale of hemp-derived edibles, beverages and tinctures will have to acquire a lower-potency hemp edible (LPHE) license from the OCM. The license application window for LPHE licenses opens on October 1 and closes on October 31.

A lower-potency hemp edible is defined by Chapter 342 as any product that:

- - Is intended to be eaten or consumed as a beverage by humans.
  - Contains hemp concentrate or an artificially derived cannabinoid as well as food ingredients.
  - Consists of servings with no more than 5mg of delta-9 THC per serving, 25 mg of cannabidiol, 25mg of cannabigerol or a combination of these ingredients that does not exceed the limits established.
  - Does not contain more than a total of 0.5mg of all other cannabinoids per serving.
  - Does not contain an artificially derived cannabinoid except for delta-9 THC.
  - Does not contain a cannabinoid derived from cannabis plants or cannabis flower.

LPHE Manufacturer

Can create, package, and label lower-potency hemp edibles, and sell them to cannabis and hemp businesses.

Endorsements available:

- - extraction and concentration
  - edible cannabinoid product handler
  - hemp product exporter

Application fee: $250

Initial license fee: $1,000

Renewal license fee: $1,000

LPHE Retailer

Can sell packaged lower-potency hemp edibles to consumer aged 21 and over, as well as delivery lower-potency hemp edibles to consumers aged 21 and over, with applicable endorsement.

Endorsements available:

- - retailer
  - delivery
  - on-site consumption
  - edible cannabinoid product handler

Application fee: $250 per retail location

Initial license fee: $250 per retail location

Renewal license fee: $250 per retail location

LPHE Wholesaler

Can buy lower-potency hemp edibles from specified cannabis and hemp businesses and sell lower-potency hemp edibles to specified cannabis and hemp businesses.

Endorsements available:

- - transporter
  - lower-potency hemp edible importer
  - hemp product exporter

Application fee: $250

Initial license fee: $10,000

Renewal license fee: $10,000

LPHE licenses can be held simultaneously with additional LPHE licenses or an industrial hemp license under Minnesota Statutes, Chapter 18K. They cannot simultaneously hold a cannabis business license.

Certain business activities require additional endorsements:

- - Edible cannabinoid product handler – required to manufacture, process, sell, handle, or store LPHEs (unless in final packaging). This endorsement is necessary for all LPHE manufacturer license holders.
  - Extraction and Concentration – required to manufacture hemp concentrate or artificially derived cannabinoid products.
  - On-site consumption – required for an LPHE retailer license holder to allow on-site consumption at their establishment.
  - Retailer operations – required for an LPHE retailer license holder intending to operate a retail establishment to sell LPHE products to customers who are aged 21 and over.
  - Delivery – required for an LPHE retailer license holder intending to deliver LPHE products directly to customers aged 21 and over. To obtain this endorsement, the applicant must submit proof of insurance for each vehicle or general liability insurance with a limit of at least $1 million for each occurrence, as well as a business plan demonstrating policies to prevent sale of LPHE products to individuals below the age of 21.
  - LPHE hemp edible importer – required for an LPHE wholesale license holder intending to import LPHEs that are manufactured outside of the state with the intent to resell the products.
  - Transporter – required for an LPHE wholesale license holder intending to transport LPHE products to other businesses. LPHE manufacturer and retailer license holders do not require this endorsement as transportation of LPHE products is already authorized for them.
  - Hemp product exporter – required if an LPHE manufacturer or wholesale license holder intends to manufacture or purchase, store, transport, or sell products containing cannabinoids that do not quality as LPHE products and are intended for sale outside of Minnesota.

Information required to be submitted with the application for an LPHE license shall include at minimum:

- - the name, address, and date of birth of the applicant.
  - the address and legal property description of the business.
  - proof of trade name registration.
  - certification that the applicant will comply with the requirements of Chapter 31 relating to the ownership and operation of a hemp business.
  - identification of one or more controlling persons or managerial employees as agents who shall be responsible for dealing with the office on all matters.
  - a statement that the applicant agrees to respond to OCM’s supplemental requests for informed.

Licensing process:

- 1. Application must complete a license application, including a signed labor peace agreement, and submit application fees. Applicant must also identify and apply for desired endorsements.
  2. Application is vetted for minimum requirements by the OCM.
  3. The OCM conducts a site inspection.
  4. If the site inspection is successfully passed, the OCM issues the license and all relevant endorsements. Operations may commence.
  5. The OCM notifies local government of the license being issued.

To begin operations, an LPHE retailer license holder must also complete the additional step of obtaining a local retail registration from the local government.

Minnesota Hemp Market Statistics

Licensed grower numbers peaked at 461 in 2020, from where they slowly fell to 230 in 2023. Meanwhile, processor licenses reached their peak of 247 in 2021 and after a fall to 151 in 2022, recovered to 158 in 2023 which was likely the result of the passage of a new law that allowed hemp-derived CBD edibles and beverages to be sold to consumers from July 1, 2022. However, in 2024, both numbers declined to 132 growers and 96 processors which may have occurred due to adult-use cannabis legalization which prompted some hemp licensees to become interested in entering the adult-use cannabis market.

There were 1,897 acres harvested in Minnesota in 2021, making it the state with the third largest number of acres harvested in that year, after Colorado and Montana. 52% acres were planted for CBD, 39% for grain, 6% for fiber and 3% for CBG. In 2022, the amount of approved acreage declined as a result of oversupply and market correction across the industry and planted acres totaled 375 with 304 acres harvested, of which 60% were grown for CBD according to the 2022 Hemp Annual Report.

In 2023, 834 acres were planted and 814 acres were harvested – an increase from the previous year. There was a dramatic shift in the purpose for which most of hemp in Minnesota was grown; only 5% acres were planted for CBD, 12% for grain, 1% for CBG and 82% acres were grown for fiber.

According to the 2024 Hemp Annual Report, Minnesota’s 132 licensed hemp growers planted 2,070 acres of hemp outdoors in 2024 – a staggering 148% up from 2023 – and harvested 1,970 acres. Around half of the acreage was grown for grain, followed by 29% dedicated to fiber and 18% dedicated to CBD. According to the USDA Farm Service Agency reporting, in 2024 Minnesota was the state with the largest amount of acres planted for grain production. Minnesota’s Department of Agriculture believes that in the future Minnesota will progress towards higher grain and fiber production.

Hemp-derived CBD Products

Around 1,250 companies and individuals applied for the hemp-derived cannabinoid products business registration close to October 1, 2023, application deadline. At the time of the closing of the registration system on August 31, 2025, 5,380 hemp businesses were registered with the OCM. Since the application window for lower-potency hemp edible (LPHE) licenses opened, OCM has received 2,009 applications for LPHE retailers, 119 applications for LPHE manufacturers, and 94 applications for LPHE wholesalers.

The 10% cannabis sales tax applied to hemp-derived CBD edible sales had raised $1,217,450 in May 2024 from 1,873 businesses. The total tax revenue collected from July 2023 to May 2024 surpassed $10 million with average monthly collections of $900,000. But monthly tax collections during 2024 were on average well over $1 million which resulted in hemp consumable product sales to be estimated at $130 million in 2024. Meanwhile, Denver-based cannabis law firm Vicente estimated that $145.1 million worth of consumable hemp products were sold in Minnesota from October 2023 to September 2024.

In 2025, monthly tax collections rose even further to an average of nearly $2 million a month, based on one Minnesota lawmaker’s statement that from January to September 2025, hemp products brought in $16 million in state revenue. According to business owners and elected officials, the Minnesota hemp-derived THC market now generates approximately $200 million in annual sales. Some market participants believe that Minnesota’s hemp-derived beverage market alone is worth nearly $100 million.

Minnesota Hemp Industry Infographics

How Can HempCBDbusinessplans Templates Help Start or Grow Your Hemp CBD Business?

A business plan is essential for securing funding. It will also help you understand how much money it will take to start a hemp CBD business and how much profit it could make. A well-structured business plan can make all the difference in demonstrating your proposed hemp CBD business’ compliance with regulations and its operational viability.

Our complete hemp CBD business plan template package is everything you need to create a professional business plan for a hemp CBD business with expert financials and projections. A complete hemp CBD business plan template package includes:

- - Excel Financial Model: change variables and immediately see the impact, break down operational and capital costs, know how much it will take to get into the business and the potential profits.
  - Word Business Plan: value proposition, market analysis, marketing strategy, operating plan, organizational structure, financial plan and more.
  - PowerPoint Pitch Deck: provide a quick overview of your hemp CBD business plan.

Shop

'70% ready to go' business plan templates

Our hemp/CBD financial models and business plan templates will help you estimate how much it costs to start and operate your own hemp/CBD business, to build all revenue and cost line-items monthly over a flexible seven year period, and then summarize the monthly results into quarters and years for an easy view into the various time periods. We also offer investor pitch deck templates.