Committee reviews proposed changes to Can Start Up loan program for cannabis microbusinesses; lawmakers raise financing and oversight concerns

Senate-only language to modify the Can Start Up loan program for cannabis microbusinesses drew extended discussion. Carrie Johnson of the Minnesota Consortium of Community Developers testified that stakeholders and lenders found the original program drafting left some provisions inconsistent with a loan model and set loan maximums too low to meet actual business costs.

Johnson described proposed changes including raising individual loan caps (proposed raise from $75,000 to $75,000 with increased match thresholds in some cases), clarifying interest-rate/fee-equivalent language, and reducing the administrative burden of annual renewals. She said community lenders expressed that startup costs for these businesses — including security and insurance — are higher than originally anticipated.

Several members expressed concern. Senator Graham questioned raising loan caps while counties face budget pressure; Senator Drayheim and Representative Baker asked why private match percentages were being lowered and whether the changes would increase state risk. Johnson said some community banks are willing to lend but that higher caps were necessary for business viability; she also said the program is a revolving loan fund and suggested ongoing funding reductions could be considered because funds revolve back into the program.

Committee members did not adopt the changes during the session. The provision was set aside for further discussion with the full conference committee and for reconciliation with appropriations targets.