Minnesota Cracks Down on Sneaky Loopholes: Why ‘Free Cannabis with a T-Shirt’ Isn’t Cutting It'

As Minnesota prepares to fully roll out its legal marijuana market, some businesses are trying to get a head start—by bending the rules. The Minnesota Office of Cannabis Management (OCM) is issuing warnings to retailers who are exploiting loopholes to sell cannabis before the proper licenses are in place. One particularly creative method catching attention involves selling merchandise like t-shirts or hats and then offering "free" cannabis as a bonus.

This "alternative payment scheme" is being flagged by regulators as a violation of the state's cannabis laws. While technically businesses are not charging for the cannabis directly, the state argues that the transaction is still an illegal sale of marijuana, as cannabis must be sold under strict guidelines and only by licensed entities.

The t-shirt loophole isn’t new to the cannabis industry. Similar strategies have been used in other states as they transitioned from illegal to regulated cannabis markets. In Minnesota’s case, the state legalized recreational marijuana earlier in 2024, but the full licensing and regulatory framework has yet to be completed. This delay has led to frustration among would-be cannabis entrepreneurs, with some businesses finding clever ways to work around the system.

Retailers using these strategies claim they are not breaking the law since they are not technically selling marijuana. However, the OCM has made it clear that these workarounds undermine the entire legal framework and could result in fines, penalties, or worse.

The state’s concern isn’t just about retailers jumping the gun—it’s about consumer safety and maintaining control over the quality and distribution of cannabis products. Legal sales of marijuana are strictly regulated to ensure that products are tested for safety and potency, something the underground market, or gray market, often lacks.

"Allowing these loopholes creates unfair competition for businesses that are trying to follow the rules and obtain the proper licenses," said a representative from the Minnesota Office of Cannabis Management. "It also increases the risk that consumers could be exposed to unregulated, potentially unsafe products."

While the state is cracking down on loopholes, the slow rollout of cannabis licenses has left many businesses eager to capitalize on the booming demand without a legal avenue to do so. Minnesota's cannabis law was approved in August 2024, but the licensing process has been bogged down by regulatory hurdles and bureaucracy, leaving businesses in limbo.

Many retailers have expressed frustration with the delays, arguing that the slow pace is creating opportunities for underground or semi-legal businesses to thrive while those waiting for licenses are losing out on potential revenue.

As Minnesota continues to develop its cannabis market, the Office of Cannabis Management plans to closely monitor compliance. The OCM is working to ensure that businesses operate within the law while aiming for a smooth transition into a fully regulated cannabis industry. The state hopes to prevent these early loopholes from creating long-term problems that could undermine the legitimacy of Minnesota’s cannabis market.

For now, businesses trying to skirt the system with creative selling methods will need to rethink their strategies—or face the consequences.

Do you think Minnesota should penalize businesses for using loopholes like ‘free cannabis with a t-shirt’ offers?