Nearly a year into tax collections on Minnesota's new lower-potency hemp industry shows that the sale of hemp edibles, beverages and other products is a $130 million business, at least.
According to numbers compiled by the state Department of Revenue, the 10% tax on cannabis product sales raised $1,217,450 in May from 1,873 tax paying businesses. Over the 11 months that the tax has been collected, the state took in $10,022,635 with average collections of a little more than $900,000 per month. But tax collections have been well over $1 million a month this year which would provide annual sales in the $130 million range.
For its first year of existence, legal hemp-derived products paid no tax and businesses were not required to register. With the passage of the recreational marijuana bill in May of 2023 came the first registration, regulation and taxation of hemp-product sales. According to monthly reports from Revenue, both registrations and tax collections started slowly, with just $699,407 in July of 2023 from 685 businesses. It peaked in March with 2,043 taxpaying hemp businesses collecting $1,364,639.
Some in the new hemp industry were surprised at the tax collection numbers, thinking they undercount the size of the business. Shawn Weber, the president of the Minnesota Cannabis Growers Cooperative and an owner of Crested River Cannabis in Morgan, said he thinks the industry is much larger. Crested River sells mostly to retailers who collect and report the taxes. But his rural-area business has a dozen or so sales a day, from walk-in customers and those who order online. He said he collects around $1,500 month in cannabis taxes.
Read more at minnpost.com