Minnesota lawmakers passed a 105-page cannabis omnibus bill during the final hours of the 2026 legislative session on Sunday, fundamentally reshaping how the state regulates both cannabis and hemp. The bill removes barriers between the two industries and gives hemp operators a direct on-ramp into the licensed cannabis market.
What the Bill Changes
The most significant provision eliminates a longstanding rule that prohibited individuals from holding both cannabis and hemp licenses at the same time. Under the new law, hemp-derived product businesses can transition into the cannabis market without abandoning their existing operations.
“This gives hemp businesses a bridge,” said supporters of the measure, pointing to the federal ban on intoxicating hemp products set to take effect November 12, 2026. That ban will restrict any hemp product containing more than 0.4 milligrams of total THC per container, a threshold that would eliminate the vast majority of hemp-derived cannabinoid products currently on shelves.
The bill also creates a new cannabis macrobusiness license starting January 1, 2027, replacing the existing medical combination business license. Indoor cultivation facilities operating under this license will be capped at 38,000 square feet of plant canopy.
Large-Format Hemp Beverages Get the Green Light
Starting August 1, hemp retailers in Minnesota can sell THC beverages in larger formats. The law allows child-resistant, resealable bottles of at least 750 milliliters containing 17 or more servings. Each serving can hold up to 5 milligrams of THC and up to 400 milligrams of approved nonintoxicating cannabinoids per container.
This change arrives as major retailers expand their hemp beverage footprints. Target recently rolled out hemp-derived THC drinks in more than 300 stores across Florida, Texas, and Illinois, building on its Minnesota pilot program that launched last year.
The large-format provision positions Minnesota as one of the most permissive states for hemp beverage sales, at least until the federal ban takes effect.
A Safety Net for an Industry Under Pressure
The bill’s timing reflects growing anxiety across the hemp sector. The U.S. Hemp Roundtable estimates that the November federal ban would eliminate roughly 95 percent of existing hemp-derived cannabinoid products, erasing more than 300,000 jobs and $1.5 billion in state tax revenue nationwide.
Minnesota’s approach stands apart from most states. Rather than waiting for federal action, lawmakers built a state-level pathway that allows hemp businesses to pivot into cannabis licensing before the federal deadline arrives.
“We’re not pretending the federal ban isn’t coming. We’re giving businesses a way to survive it.” — Minnesota state legislator during floor debate
The bill passed with bipartisan support, though some lawmakers raised concerns about market consolidation as hemp operators migrate into cannabis licensing.
What Happens Next
The cannabis macrobusiness license won’t become available until January 2027, but hemp businesses can begin planning their transition now. The Minnesota Office of Cannabis Management will handle licensing applications and set additional compliance requirements, including lab testing standards for products crossing between supply chains.
Hemp operators who choose not to transition into cannabis will still be able to sell products that comply with the new federal THC limits after November. However, the drastically reduced THC thresholds mean most current product lines will need reformulation.
Industry Implications
Minnesota’s model could serve as a template for other states wrestling with the same problem. Several states, including Colorado and Oregon, have explored similar hybrid frameworks but none have moved as quickly.
The bill also signals a broader shift in how states view the relationship between hemp and cannabis. For years, regulators treated them as separate industries. Minnesota’s merger acknowledges what market dynamics have already made clear: the line between hemp-derived and cannabis-derived products has been blurring for years.
For consumers, the immediate impact is more product variety in larger formats starting this summer. For businesses navigating the federal ban, Minnesota just became one of the safest places to operate.
These statements have not been evaluated by the Food and Drug Administration. CBD products are not intended to diagnose, treat, cure, or prevent any disease.
