>> CATHY: WHILE THE LEGAL MARIJUANA MARKET IS STILL AT LEAST A YEAR AWAY FROM GETTING UP AND RUNNING, THERE'S ALREADY CONCERNS ABOUT WHO WILL BE ABLE TO PROFIT OFF OF IT.

STATE LEGISLATORS ARE CURRENTLY FINE-TUNING THE WAYS THAT SOCIAL EQUITY FACTORS INTO LICENSES TO START A RECREATIONAL MARIJUANA BUSINESS.

MEANWHILE, AN INCREASING NUMBER OF MINNESOTA TRIBES HAVE ALREADY BEGUN OR HAVE ANNOUNCED PLANS TO START GROWING OR SELLING CANNABIS.

JOINING ME NOW WITH MORE PERSPECTIVE ON THIS EMERGING INDUSTRY IS MELISSA OLSON, A REPORTER WITH MINNESOTA PUBLIC RADIO'S NATIVE NEWS PROJECT, AND ANTHONY NEWBY, CEO AND FOUNDER OF CULTIVATED CBD.

THANK YOU BOTH FOR JOINING US.

>> GLAD TO BE HERE.

>> Cathy: APPRECIATE IT.

ANTHONY, THERE IS THIS BILL MOVING THROUGH THE LEGISLATURE THAT'S SUPPOSED TO TWEAK THE CURRENT CANNABIS LAW.

THERE'S A LOT IN THIS.

AND I'M WONDERING, AS AN ENTREPRENEUR, ARE YOU PRETTY COMFORTABLE WITH WHAT YOU'RE SEEING SO FAR?

>> WELL, GIVEN THE FACT THAT WE ARE TRYING TO ESSENTIALLY BIRTH A WHOLE NEW INDUSTRY THAT'S NEVER EXISTED BEFORE IN THE HISTORY OF THE STATE, I THINK WE'RE ON THE RIGHT PATH.

I THINK THE OFFICE OF CANNABIS MANAGEMENT AND THE PEOPLE THAT ARE LEADING THAT DIVISION AND BUILDING OUT THAT STATE OFFICE ARE, FRANKLY, DOING A GREAT JOB, GIVEN ALL THE MOVING PIECES.

STILL A LOT OF UNANSWERED QUESTIONS ND MOVING THROUGH THIS SESSION, I THINK WE'LL KNOW A LOT ORE.

BUT, GENERALLY, I THINK WE'RE ON THE RIGHT TRACK.

>> Eric: WHAT'S HAPPENING ON THE RESERVATION LEVEL, THE TRIBES CAN MOVE MORE QUICKLY, I ASSUME.

>> THEY HAVE.

AS YOU KNOW, TRIBES ARE SOVEREIGN, AND WE'VE SEEN A NUMBER OF COMMUNITIES OPEN UP THEIR OWN DISPENSARIES, SO RED LAKE NATION, WHITE EARTH NATION, EACH OPERATE A DISPENSARY NOW.

LEECH LAKE HAS SAID THAT THEY MIGHT SUPPORT INDIVIDUAL ENTREPRENEURS ON THE RESERVATION.

PRAIRIE ISLAND HAS ANNOUNCED IT'S OPENING UP A DISPENSARY.

AND THE MILLE LACS BAND OF OJIBWE HAS RECENTLY ANNOUNCED THEY WILL BE BUILDING A BIG GROW FACILITY.

BUT THEY WON'T OPERATE A DISPENSARY.

SO THERE'S A LOT HAPPENING AND EACH COMMUNITY IS SORT OF DOING THEIR OWN THING.

>> Cathy: ANTHONY, YOU AND I TALKED ON MPR AND WE TALKED ABOUT THE SOCIAL EQUITY APPLICANTS UNDER THIS LAW, RIGHT?

BUT THESE NEW RULES WE'RE LOOKING AT, 65% INSTEAD OF 100% OF THE INVESTORS WOULD NEED TO QUALIFY AS SOCIAL EQUITY APPLICANTS.

YOU'RE GOING TO SCALE THAT BACK, RIGHT?

ARE YOU COMFORTABLE WITH THAT?

>> YOU KNOW, I ACTUALLY THINK IT'S A GOOD PLACE TO START.

WHAT OFTEN HAPPENS IN CANNABIS IS, IT'S INCREDIBLY CAPITAL INTENSIVE, AND, AND, SO, ENTREPRENEURS, I'M NO DIFFERENT, WILL START A BUSINESS, AND THEN YOU FIND OUT THE VOLATILITY OF THE MARKET, THE UP AND DOWN NATURE OF THE INDUSTRY REQUIRES YOU TO RAISE MORE MONEY THAN YOU THOUGHT YOU PROBABLY NEEDED.

AND, SO, IF YOU START AT 51%, WHICH WAS THE ORIGINAL PROPOSAL, YOU GO BACK TO THE CAPITAL MARKETS, YOU RAISE MORE MONEY, YOU HAVE TO SACRIFICE YOUR EQUITY TYPICALLY AND YOU VERY QUICKLY FIND YOURSELF IN A MINORITY OWNERSHIP POSITION.

THAT'S WHAT'S HAPPENED IN OTHER STATES.

AND SOCIAL EQUITY APPLICANTS WHO ON DAY ONE HAD A LICENSE AND CONTROL OF THEIR BUSINESS TURN AROUND A YEAR, 18 MONTHS LATER AND FIND OUT THEY'VE LOST CONTROL, SOMETIMES LOST CONTROL OF THE BUSINESS AL TOTAL.

AND WE'RE TRYING TO -- ALTOGETHER.

AND WE'RE TRYING TO AVOID THAT IN MINNESOTA.

>> Eric: WHO ARE YOU TRYING TO TARGET AS FAR S LICENSEES?

IT'S A POPULATION THAT RAN AFOUL OF MARIJUANA LAWS EARLIER IN THEIR LIVES?

>> IT'S A MULTIPRONGED APPROACH.

SO SOCIAL QUITY APPLICANTS, THE DESCRIPTION INCLUDES MULTIPLE DIFFERENT VARIABLES.

SO ONE OF THEM IS IMPACTS TO YOURSELF OR YOUR COMMUNITY THROUGH THE WAR ON DRUGS.

SO, COMMUNITIES LIKE MYSELF, I LIVE IN NORTH MINNEAPOLIS, AND THE DATA IS VERY CLEAR ABOUT COMMUNITIES LIKE THAT BEING SORT OF OVERPOLICED AND IMPACTED.

BUT THERE ARE OTHER DEFINITIONS AS WELL.

IT'S NOT A SINGULAR DEAL, SO IT ALLOWS VETERANS, FOR EXAMPLE, TO QUALIFY UNDER THE SOCIAL EQUITY APPLICANTS.

AND MULTIPLE OTHER DESCRIPTIONS AS WELL.

>> Cathy: OKAY, MELISSA, HOW DO TRIBAL NATIONS FIT UNDER THE SOCIAL EQUITY UMBRELLA, IF THEY DO?

>> MAYBE THEY SORT OF OPERATE THEIR DISPENSE YEARS FOR THE -- DISPENSARIES FOR THE BENEFIT OF THEIR ENTIRE COMMUNITY.

SO MAYBE ONE ANALOGY IS TO THINK ABOUT A MUNICIPAL-OWNED LIQUOR STORE.

A COMMUNITY LIKE RED LAKE, THE COMMUNITY T WHITE EARTH, THEY OPERATE THEIR DISPENSARY FOR THE BENEFIT OF THE ENTIRE COMMUNITY.

IT'S A LITTLE BIT DIFFERENT THAN, SAY, INDIVIDUAL ENTREPRENEURS ENTERING THE MARKET.

IN THOSE COMMUNITIES, WE SEE, YOU KNOW, THE BAND OR THE NATION OPERATING THOSE DISPENSARIES.

>> Eric: DO THE TRIBES EXPECT TO MAKE BIG MONEY OFF OF THIS ENTERPRISE?

>> AGAIN, THEY'RE EACH KIND OF DOING THEIR OWN THING.

WHEN I SPOKE WITH, YOU KNOW, PEOPLE AT MILLE LACS, THEY TALK ABOUT OPENING AND BUILDING THIS NEW GROW FACILITY.

THEY DO EXPECT TO EMPLOY PEOPLE THROUGH THAT.

THEY EXPECT TO CREATE AS MANY AS, I WANT TO SAY, BETWEEN 30 AND 50 JOBS ON THE RESERVATION.

>> Eric: WHO WOULD BUY THE PRODUCT?

THE OTHER DISPENSARIES?

>> WE DON'T KNOW YET.

>> Eric: OH, OKAY.

>> YEAH.

WE KNOW THAT TRIBAL NATIONS ARE GOING TO COMPACT WITH THE STATE OF MINNESOTA.

WE'VE HEARD A LITTLE BIT OF THAT BUZZ OMING OUT OF THE GOVERNOR'S OFFICE.

BUT WE DON'T KNOW WHAT'S IN THOSE COMPACTS YET.

>> Cathy: ANTHONY, THERE'S GOING TO BE, EVIDENTLY, A LOTTERY FOR LICENSES.

AND I DON'T KNOW WHAT YOU THINK OF THAT EITHER.

IS IT FAIR OR NOT?

>> WELL, IT'S A NEW CONCEPT.

WE HAVE NOT HEARD THE NOTION OF A LOTTERY IN DISCUSSIONS WITH OCM UNTIL VERY RECENTLY.

AND, FRANKLY, THERE'S SOME GOOD AND BAD SIDES OF IT.

ON THE POSITIVE SIDE, I THINK FROM THE OCM'S PERSPECTIVE -- >> Cathy: OFFICE OF CANNABIS MANAGEMENT.

>> OFFICE OF CANNABIS MANAGEMENT.

THEY WANT SOMETHING THAT APPEARS AS NEUTRAL AS POSSIBLE.

SO THAT IT'S NOT APPEARING THAT THE STATE IS PLAYING FAVORITES AND WE UNDERSTAND THAT.

SO THEY, I THINK, VIEW THE LOTTERY AS A WAY TO SORT OF LEVEL THE PLAYING FIELD.

ON THE OTHER SIDE OF THAT, WE SEE THAT STATES HAVE TRIED THE LOTTERY, PARTICULARLY WITH SOCIAL EQUITY APPLICANTS.

IT DOES NOT GET TO THE HEART OF THE SOCIAL EQUITY PROBLEM.

IT'S VERY TOUGH TO FIX A DELIBERATE, SPECIFIC PROBLEM WITH SORT OF A CHANCE, DRAW PING PONG BALLS OUT OF A HORN.

SO STATES -- HOPPER.

SO STATES LIKE ARIZONA HAVE TRIED A LOARTD, EXPERIMENTED WITH IT, AND A YEAR LATER, 18 MONTHS LATER, WE FIND ALMOST NONE OF THOSE FOLKS ARE LEFT IN THE INDUSTRY.

LOTTERY.

SO WE'RE SORT OF ASKING THAT THE OFFICE OF CANNABIS MANAGEMENT CONSIDER MERIT-BASED SYSTEM, AT LEAST FEATHER THAT INTO THEIR PROPOSAL WITH A LOTTERY AND SEE IF THERE'S MAYBE A WAY TO DO BOTH A LOTTERY AND WEIGHT THOSE THAT CAN DEMONSTRATE THAT THEY HAVE SOME BUSINESS ACUMEN, PUT TOGETHER A SERIOUS PROPOSAL AND ARE LIKELY TO SUCCEED IN THE INDUSTRY.

>> Eric: WILL THE TRIBES CALL FOR EXPERTS FROM OUT OF STATE, SAY, TO COME IN ND WORK WITH THE TRIBES?

I SUPPOSE IT DEPENDS RESERVATION TO RESERVATION, I SUPPOSE.

>> WHAT I DO KNOW IS THAT -- SO I HAD A CHANCE TO CHAT WITH THE LIAISON, THE TRIBAL LIAISON FROM THE OFFICE OF CANNABIS MANAGEMENT, AND SHE'S JUST, AT THIS POINT, SAYING THEY'RE REALLY STILL MAKING THEIR RULES.

SO THERE ISN'T A LOT KNOWN YET.

BUT SHE WAS A LITTLE BIT WORRIED THAT, YOU KNOW, TRIBES ARE NEW TO THIS INDUSTRY AS WELL.

>> Eric: SURE.

>> AND, YOU KNOW, PEOPLE COMING FROM OUT OF STATE, YOU KNOW, MAY BE LOOKING TO, YOU KNOW, CONSULT AND TRIBES MAY NOT KNOW, YOU KNOW, WHO TO TRUST.

>> Cathy: SAY, YOU MENTIONED THE COMPACTS, THE GOVERNOR'S OFFICE IS WORKING WITH THE TRIBAL NATIONS ON COMPACTS.

IF, SAY, ONE OF THE NATIONS DECIDES TO HAVE A DISPENSARY SOMEWHERE OFF THEIR LANDS, RIGHT, WOULD THEY BE TAXED?

WOULD THE STATE TAX THEM?

>> GOOD QUESTION.

WE DON'T KNOW.

AND I HAVE NOT HEARD OF A DISPENSARY OFF TRIBAL LAND AS OF YET.

>> Cathy: OKAY.

WELL, THERE'S A LOT TO TALK ABOUT, OBVIOUSLY.

>> Eric: WE'LL LOOK FOR THAT BILL AT