He Signed the Lease First. What Minnesota's licensing process costs operators who move in the wrong order.

Drew Duffy, MHA, FACHE  ·  Founder, CannaPath Regulatory Solutions  ·  8 min read

A few years back a friend of mine retired out of healthcare and decided he wanted to open a cannabis shop. He knew what he was doing in a lot of ways. He had run operations for decades, he understood budgets, and he was not the sort of person who rushes into things.

He found a building he liked. Good visibility, fair rent, a part of town that made sense. He negotiated, he signed, and he called me a little while later to walk through what came next.

What came next was that the city had a buffer rule, and his building sat inside it.

Unwinding that lease took months. The rent was the smallest part of what it cost him. He lost the better part of a year of runway, he paid professionals twice, and he spent that whole stretch working on a problem instead of working on a business.

Checking the buffer would have taken one afternoon. It would have cost nothing. He had the ability to do it at any point before he signed, and he simply did it after instead of before.

I have thought about that sequence a lot since, because I keep seeing it. Not always with a lease. Sometimes it is a security system bought before anyone read the requirements it had to meet. Sometimes it is a set of plans written before the site was chosen. The specifics change and the shape stays exactly the same, which is why I want to talk about the shape.

Where Minnesota operators actually are right now

Minnesota went from rulemaking to a live market quickly. Rules were adopted in April 2025, the first lotteries ran that June and July, and the first operational license was issued to a microbusiness in June of 2025.

Then came the part nobody talks about much. By the close of 2025, the state had issued roughly 118 full cannabis licenses against something in the neighborhood of 1,405 preliminary approvals.

Sit with that gap for a second, because the gap is the story. Well over a thousand people were holding an approval that permits them to secure a site, raise money, and get ready, and does not permit them to sell anything. That is a lot of Minnesotans in the same waiting room, paying carrying costs, trying to figure out what they are supposed to do next.

Most of them will get there. Some will run out of money first, and a meaningful share of those will run out of money not because the process was too expensive, but because they paid for parts of it more than once.

Why the wrong order is so easy to fall into

This is worth being fair about. Operators are not making these mistakes because they are careless. The process invites the mistake.

1. Two different authorities, moving at different speeds

OCM licenses you. Your city or county certifies your zoning and issues your retail registration. Those are separate approvals, held by separate people, on separate timelines, with separate rules. Clearing one tells you very little about the other. And local buffer distances in Minnesota are set locally, which means the rule that ended my friend's lease was a rule his city wrote, not one he could have looked up once for the whole state.

2. Zoning approval is not permission to sell

This one strands people. Zoning certification and local retail registration are two different things. Local governments are allowed to cap how many retail registrations they issue, and they choose how to hand them out. It is possible to get certified, pass inspection, pay the state license fee, receive your license, and still have no legal way to open the doors. Every one of those steps cost money.

3. Guidance arrives unevenly

In a program this new, you will ask questions that matter and wait a long time for answers. That is not a knock on anyone. It is what happens when a regulator and an industry are both being built at once. But it leaves operators making real decisions on their own reading of the rule, which is fine, right up until the answer arrives and it is different from the reading.

4. The clock is real, and it is yours alone

Preliminary approval comes with an 18-month window to convert to a license. That clock runs from your approval, not from a date everyone shares, so the person next to you in the waiting room is on a different deadline than you are. Extensions exist and legislation in 2026 changed how they work, which is worth understanding before you need one.

5. Spending is the only thing that never needs anyone's permission

This is the one that does the damage. When you are blocked on four fronts and every answer is somewhere else, writing a check feels like progress, because it is the single action available that requires approval from nobody. So people buy. They build. They hire. And they do it before the verification that would have told them what to buy.

 The same three tasks. The difference is which one goes last.

The clarity: what you can actually control

Here is the part I believe in, and it is simpler than the problem it solves.

Every expensive, irreversible commitment in this process has a cheap or free verification step that belongs in front of it. Read the ordinance before you sign. Get the local government's read on your specific address in writing before you sign. Hand your security vendor the actual requirement and make them confirm compliance before you buy. Walk the space against the inspection criteria before you request the inspection.

None of that is expensive. Almost all of it is free. And it is available to you on the days when everything else is stuck, which is exactly when the urge to spend is strongest.

A few habits that follow from it:

•     Know your own expiration date. Not the general rule. Your date. If you cannot say it out loud, find it this week.

•     Sort your blocked list weekly into waiting on OCM, waiting on someone else, and waiting on me. The third column is longer than it feels, and it is the only one you can work on today.

•     Ask questions in writing even when you also ask by phone, and log what you asked, when, and what you decided when no answer came. If that decision is ever questioned, that record is the difference between reasoning and a shrug.

•     Keep track of anything you had to redo, and why. Rework is the largest avoidable cost in pre-licensure and it hides in plain sight, because each instance feels like bad luck at the time.

•     Before you spend at any scale, ask what has to be true for this to be money well spent, and whether you have confirmed it or assumed it.

A last thought

None of this is about being cautious. My friend was cautious. He was careful with money and careful with people and he still lost most of a year, because caution applied in the wrong order is just expensive caution.

The operators I see come through this in decent shape are not the ones who moved fastest or spent the least. They are the ones who never had to do the same thing twice. That is a smaller skill than it sounds like, and it is almost entirely a matter of sequence.

If you are sitting in that waiting room right now, wondering what you are supposed to be doing this week, the answer is usually the free thing you have been putting off because it did not feel like progress.

A note from us

We put the whole sequence on a single page — eight gates from preliminary approval to first sale, with the cheap verification that belongs in front of each commitment. It is free, it is on the site, and it is genuinely useful on its own whether you ever buy anything from us. If you want the full version with the budget structure and the tracking tools behind it, that lives in the free resources page.

And if you would rather just have someone walk your space with you before you commit to it, that is what we do.

Drew Duffy is the founder of CannaPath Regulatory Solutions, a Minnesota cannabis compliance consultancy. Local ordinances vary and Minnesota's cannabis framework continues to change. Confirm current requirements with OCM and your local government. This article is general information, not legal advice.