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Cannabis Tax
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On May 30, 2023, a bill was signed to legalize the sale and use of recreational cannabis in Minnesota. Starting July 1, 2023, all sellers of taxable cannabis products must register with the Minnesota Department of Revenue to remit the new Cannabis Tax.
The Cannabis Tax is 10% of gross receipts from retail sales of taxable cannabis products.
You can sign up to receive Cannabis Tax Updates by email.
Exemptions
Sales that are exempt from Cannabis Tax include:
- Products purchased on an Indian reservation from a seller licensed by the tribe.
- Medical cannabis, which are items purchased by or for a patient enrolled in the state’s medical cannabis registry program.
- Retailers purchasing the product for resale. Retailers purchase products exempt from sales tax by providing their vendor with Form ST3 Certificate of Exemption claiming the "resale" exemption. Retailers sell products to the end customer and are responsible for collecting sales tax on the product.
Legal Products to Sell
Currently, only edible cannabinoid products and nonintoxicating topical products are legal to sell.
Any products not listed here may not yet be legal in Minnesota. If you have questions on any product you are selling, email us at salesuse.tech@state.mn.us.
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Edible cannabinoid products are any product that:
- Are meant for people to eat or drink
- Has hemp concentrate mixed with food ingredients
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Is not a drug
Edible cannabinoid products can not contain any of the following:
- More than 5 milligrams of tetrahydrocannabinol (THC) per serving
- More than 50 milligrams of THC per package
- Beverages may contain two servings per container (10 milligrams)
- Any artificially derived cannabinoid other than delta-8 and delta-9 THC
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Synthetic cannabinoids
Starting July 1, 2023, edible cannabinoid products will be subject to the 10% Cannabis Tax.
In addition to the Cannabis Tax, taxable cannabis products are currently subject to both:
Nonintoxicating topical products are any product that:
Nonintoxicating topical products cannot be manufactured, marketed, distributed, or intended to be consumed:
Nonintoxicating topical products are not subject to the 10% Cannabis Tax, however, they are subject to both:
A bundled transaction is when a retailer sells a combination package consisting of at least two separate items sold together for one price.
Bundled Transaction Example
A shop located in a city without a local tax sells edible gummies bundled with a hat for $10. Below is an example of how the tax should be charged:
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General Rate Tax (6.875%) | |
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Because the products are bundled together for one price, the total charge is taxable.
Non-Bundled Transaction Example
A shop located in a city without a local sales tax sells edible gummies and a hat in the same transaction. Below is an example of how the tax should be charged:
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| Hat (non-taxable) | $5 |
General Rate Tax (6.875%) | |
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Because the products are sold as separate items, only the gummies are taxable. Clothing is exempt and is not included in the tax calculation.
You will report and pay Cannabis Tax on your sales and use tax return. Your filing frequency depends on your monthly Sales and Use Tax liability. For filing frequency details, see Filing Information.
Minnesota taxes most sales of tangible personal property (goods) and some services. For details, visit Taxable Sales in our Sales and Use Tax Business Guide.
No. Once you receive a Minnesota Tax ID Number, it remains active until you request to cancel it or we revoke the permit for noncompliance.
Yes. If you sell edible cannabinoids to consumers, you must register with the Department of Health by October 1, 2023. For more information, visit the Department of Health.
If you suspect that a hemp-derived cannabinoid is being sold that violates Minnesota law, you may provide that information to the Department of Health.
