Minnesota Lawmakers To Revisit Marijuana Law’s Expungement Provisions That Make It Hard To Prove Social Equity Business Status

“Yes, it disadvantaged them in terms of their cannabis business plan but it allowed them to much-more-easily get jobs and housing.”

By Peter Callaghan, MinnPost

Supporters of the legislation that is legalizing recreational cannabis in Minnesota are starting to wonder if two rights can make a wrong.

Two pillars of the legalization effort are that people who were caught up in the enforcement of prohibition should have their criminal records expunged and that the same people and their communities should now benefit from the new industry.

But in some cases expungement is making it harder for people with arrests and convictions to prove their status as social equity applicants. And a related criminal justice reform—diversion programs to keep first-time offenders from having conviction records in the first place—is also keeping some applicants from being able to prove they suffered from prohibition because the law requires convictions.

“What a great thing that we expunged all of these misdemeanor convictions,” said cannabis attorney Jason Tarasek during a continuing legal education conference on cannabis law last week. “Perhaps we shouldn’t have done that before they needed the evidence of convictions to apply for social equity status.”

The Office of Cannabis Management (OCM) and its verification vendor, CSI, are still processing the last of more than 3,000 requests from potential cannabis business owners who want the privileges that come from being a social equity applicant. That designation covers people from high-poverty neighborhoods, veterans and those who have been harmed by past enforcement through their own or a family member’s conviction. Most immediately, such a certification provides entry into a lottery sometime in the fall for the first 280 cannabis business licenses.

Separately, local criminal justice systems and the state are automatically expunging records of lesser cannabis offenses while a new state board will consider expungement of more-serious convictions. The purpose is to make it easier for people with convictions to obtain housing, employment and other benefits.

But those two goals are conflicting with some of the people the new law is meant to help being left out.

Wes King hopes to become a cannabis microbusiness owner, the license that allows both growing and retail, and applied for social equity status when the process opened on June 24. He had been arrested in Ramsey County in 2006 for fifth degree marijuana possession. He was given 30 days in jail and five years of probation, and his case was dismissed when he met the terms of probation. But in the end, he avoided having a conviction on his record via a stay of adjudication.

As such, OCM rejected his application for social equity status, despite a letter from Ramsey County District Court. So, for King and others, programs designed to prevent young, first-time offenders from having a criminal record now keep them from being considered social equity applicants under the cannabis law.

“What that means is that if it didn’t result in a conviction that means all these pre-trial diversions and stays of adjudication and stays of imposition with order to vacate or dismiss, all of us who did right by the court and successfully completed probation are disqualified because it resulted in a dismissal,” King said.

“Two restorative justice programs are canceling each other out,” King said.

He intends to file a challenge in Ramsey County District Court asking it to stay completion of the social equity certification process and the lottery until his concerns with the program are resolved.

During the same Cannabis Law Conference, sponsors of the original 2023 law and this year’s updates said they were aware of the issues raised and will look into making changes next session.

“I think this is an issue that we will return to,” said Rep. Zack Stephenson, the Coon Rapids DFLer who was the prime House sponsor of HF 100. He said he is familiar with stays of adjudication from his work in the Hennepin County Attorney’s Office, saying it is the most common resolution for those charged with fifth degree possession.

“We had to draw a line somewhere,” said Sen. Lindsey Port, the Burnville DFLer who is the lead Senate sponsor of both the original law and this year’s revisions. “That was the most obvious, clear line that we could draw.

“But there will be changes every single year for a while,” Port said. “We’ll be learning with the community.”

Any changes won’t come in time for people hoping to get into the first license lottery, meant to give social equity applicants an early start on preparing for legalization in the spring. Any changes will come after the social equity lottery in the fall and the general license lottery at the end of 2024 or early 2025.

In a statement Monday, OCM said it has tried to take steps to help applicants navigate the system but is ultimately bound by what the statute says about convictions.

“We provided guidance and a number of ways that potential applicants could go about retrieving official records, if they did not retain them from the time of their conviction,” the agency stated. “We instructed CSI, Inc., to work with applicants who expressed document challenges to the greatest extent possible, including offering suggestions ranging from reaching out to former attorneys, parole officers, court offices, and financial institutions that might have records of court transactions that could be used to corroborate a prior conviction.”

“Unfortunately, some individuals were simply unable to locate and provide the documentation required by state statute to demonstrate their prior conviction,” it stated. “As the office is unable to supersede or waive requirements spelled out in state statute, there is no available mechanism to appeal an absence of required documentation. We have raised this issue with legislators who are evaluating a possible legislative solution for next session.”

Many of the attorneys at the Cannabis Law Conference were in the midst of helping clients apply for social equity status. While the deadline for filing for the certificates that will allow entry into the fall lottery was July 10, OCM and its verification vendor CSI continues to process applications. Many applicants have already received their certification and are using them to enter the license lottery. Those still waiting have been told the process should be completed August 5 in time for the end of the lottery license application period that ends at 11:59 on August 12. Because of that, OCM won’t say how many applicants received certification and how many were rejected.

Anecdotally, however, some applicants and attorneys helping them navigate the process say a lack of records is a problem, that getting the paperwork required by OCM has been difficult for some. Jen Reise, an attorney helping clients prepare their applications, described one client who couldn’t find records and instead submitted a letter from an employer who said they didn’t get a job because of a cannabis conviction.

“That fact pattern that we were worried about happening to people did, in fact, happen,” Reise said. “Their records were expunged and they can’t be verified as social equity applicants.”

Tarasek said successful attempts to find ways around the lack of records have differed county by county.

“We’ve now hidden the very stuff that they need to get into the system,” Tarasek said before describing his efforts on behalf of clients who wanted to apply for social equity applicant verification. Sometimes records are retained by counties but hidden and not disclosed. That has allowed Hennepin County, for example, to unseal them on request to allow a copy to be made and then reseal them.

“But other counties, when I asked if I could do that, didn’t know what I was talking about,” he said. Tarasek said he is in the position now to tell clients, “who is convinced they are going to be a millionaire…that sorry, we can’t get you into social equity because the courts destroyed the records. It is an obstacle and it is unfortunate we hadn’t thought of that.”

Stephenson said the drafters of the laws wanted to give some advantage to those harmed by prohibition and decided to use convictions as the measurement because it was “easy to track, easy to verify, that you were involved in the criminal justice system because of cannabis.”

“For people who got a stay of adjudication for a cannabis offense, that was a good thing at the time and it remains a good thing because it means they were never convicted of a felony if they successfully completed probation,” Stephenson said. “But for establishing social equity status, it’s not a good thing. The [cannabis] law requires a conviction.”

He said he will look at including those with such stays into the definitions in the law.

“On balance, those people made the right decision,” he said. “Yes, it disadvantaged them in terms of their cannabis business plan but it allowed them to much-more-easily get jobs and housing and a myriad of other things.”

“Now we’re thinking about all the ways being involved in the criminal justice system can end for someone,” he said. “Oftentimes it doesn’t end with conviction.”

This story was first published by MinnPost.

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Photo courtesy of Philip Steffan.