Definition of true party of interest modified to exclude municipal cannabis stores.

A bill for an act

relating to cannabis; modifying definition of true party of interest to exclude

municipal cannabis stores; amending Minnesota Statutes 2024, section 342.185,

subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 342.185, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) As used in this section, the following terms have the

meanings given.

(b) "Control" means the power to independently order or direct the management,

managers, or policies of a cannabis business.

(c) "Financial institution" means any bank, mutual savings bank, consumer loan company,

credit union, savings and loan association, trust company, or other lending institution under

the jurisdiction of the Minnesota Department of Commerce, the United States Department

of Commerce, or both.

(d) "Financier" means any person that:

(1) is not a financial institution or government entity;

(2) provides money as a gift, grant, or loan to an applicant for a cannabis business license,

a cannabis business, or both; and

(3) expects to be repaid for the money provided, with or without reasonable interest.

(e) "Gross profit" means sales minus the cost of goods sold.

(f) "Revenue" means the income generated from the sale of goods and services associated

with the main operations of a business before any costs or expenses have been deducted.

(g)
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(1)
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"True party of interest" means an individual who as an individual or as part of

another business:

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(1)
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(i)
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is a sole proprietor of a sole proprietorship;

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(2)
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(ii)
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is a partner in a general partnership;

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(3)
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(iii)
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is a general partner or limited partner in a limited partnership, a limited liability

partnership, or a limited liability limited partnership;

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(4)
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(iv)
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is a member of a limited liability company or a manager in a limited liability

company;

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(5)
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(v)
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is a corporate officer or director or holds an equivalent title in a privately held

corporation;

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(6)
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(vi)
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is a stockholder in a privately held corporation;

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(7)
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(vii)
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is part of a multilevel ownership structure;

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(8)
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(viii)
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has membership rights to a nonprofit corporation in accordance with the

provisions of the articles of incorporation or bylaws for the nonprofit corporation;

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(9)
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(ix)
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has the right to receive some or all of the revenue, gross profit, or net profit from

a cannabis business during any full or partial calendar or fiscal year; or

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(10)
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(x)
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has the right to exercise control over a cannabis business.

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(2)
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True party of interest does not include:

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(1)
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(i)
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an individual receiving payment for rent on a fixed basis under a lease or rental

agreement;

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(2)
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(ii)
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an employee of a cannabis business who receives a salary or hourly rate

compensation if the employee does not otherwise hold an ownership interest in the cannabis

business or have the right to exercise control over the cannabis business;

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(3)
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(iii)
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an individual who receives a bonus or commission based on the individual's

sales, if the bonus or commission does not exceed ten percent of the individual's sales in

any given bonus or commission period and the terms of the bonus or commission-based

compensation agreement is in writing;

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(4)
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(iv)
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an individual with an ownership interest held or acquired solely for the purpose

of passive investment as described in Code of Federal Regulations, title 31, section 800.243;

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(5)
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(v)
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an individual contracting with a cannabis business to receive a commission for

the sale of a business or real property;

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(6)
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(vi)
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a consultant receiving a flat or hourly rate compensation under a written

contractual agreement;

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(7)
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(vii)
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any person with a contract or an agreement for services with a cannabis business,

such as a branding or staffing company, as long as that person does not obtain any ownership

or control of the cannabis business;
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or
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(8)
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(viii)
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a financial institution
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.
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; or
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(ix) a person who contracts with a city or county to operate a municipal cannabis store

under section 342.32, subdivision 5.

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