field_block:node:page:title

Cannabis Tax

field_block:node:page:body

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. These products are also subject to the General Rate sales tax of 6.875% and applicable local taxes. You can use our Rate Calculator page to determine what General Rate sales tax and applicable local tax to charge.

You can sign up to receive Cannabis Tax Updates by email.

Exemptions

Sales that are exempt from Cannabis Tax include:

Products purchased on Tribally Regulated Land 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.

field_block:node:page:field_paragraph

Edible Cannabinoid Products [+]

Edible cannabinoid products are any product that:

Are meant for people to eat or drink
Has hemp concentrate mixed with food ingredients
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
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:

6.875% state general rate sales tax
Any applicable local sales taxes based on where the transaction takes place

Nonintoxicating Topical Products [+]

Nonintoxicating topical products are any product that:

Contains nonintoxicating cannabinoids
Are meant to be applied externally to a part of the body of a human or animal

Nonintoxicating topical products cannot be manufactured, marketed, distributed, or intended to be consumed:

By inhaling smoke, aerosol, or vapor from the product
Through chewing, drinking, or swallowing
Through injection or application to a mucous membrane or nonintact skin

Nonintoxicating topical products are not subject to the 10% Cannabis Tax, however, they are subject to both:

6.875% state general rate sales tax
Any applicable local sales taxes based on where the transaction takes place

Register to File and Pay the Tax

You must log in to your e-Services account and add the Cannabis Tax, for details and instructions see Add Local Tax and Other Taxes to a Sales and Use Tax Return.

If you are not registered, you must register for a Minnesota Tax ID Number. For details see Starting a Business.

Other Cannabis Tax Topics

Here are answers to questions you might have regarding Cannabis Tax.

What is a bundled transaction and how is it taxed? [+]

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 Bloomington sells edible gummies bundled with a hat for $10. The Bloomington location is subject to the following taxes:

• 6.875% state general rate sales tax
• 0.5% Bloomington Sales and Use Tax
• 0.5% Hennepin County Transit Tax
• 0.15% Hennepin County Sales and Use tax
• 0.25% Metro Area Sales and Use Tax for Housing
• 0.75% Metro Area Transportation Sales and Use Tax

Because the products are bundled together for one price, the total charge is taxable. Below is an example of how to charge tax.

Item	Amount
Gummies and Hat Bundle	$10
General Rate Tax (6.875%)	$0.69
Local Taxes (2.15%)	$0.22
Cannabis Tax (10%)	$1
Total Tax	$1.91
Total	$11.91

Non-Bundled Transaction Example

A shop located in Bloomington sells edible gummies and a hat in the same transaction. The Bloomington location is subject to the following taxes:

•    6.875% state general rate sales tax
•    0.5% Bloomington Sales and Use Tax
•    0.5% Hennepin County Transit Tax
•    0.15% Hennepin County Sales and Use tax
•    0.25% Metro Area Sales and Use Tax for Housing
•    0.75% Metro Area Transportation Sales and Use Tax

Because the products are sold as separate items, only the gummies are taxable. Clothing is exempt and is not included in the tax calculation. Below is an example of how to charge tax.