Senate panel approves technical changes to cannabis small-business loan programs, lowers admin cap

Senate File 14‑49, a policy bill to adjust Minnesota’s cannabis small-business development programs, passed the Senate Jobs and Economic Development Committee on a voice vote and was referred to the Commerce Committee.

The bill, carried by Sen. Scott Putnam, would revise provisions of two programs created following the 2023 cannabis legalization bill — often referred to in committee testimony as the Can Start Up and Can Navigate programs — now administered by the Department of Employment and Economic Development (DEED). Putnam described the measure as “policy only” and said it aims to make technical and operational improvements to those programs while adding “some opportunities for accountability.”

The measure would increase small loan caps for the startup program (from $50,000 to $75,000 for loans without a local match, and from $150,000 to $200,000 when paired with match), tighten DEED review timelines by establishing a 30‑day hard limit for agency review, and expressly permit nonprofit program administrators to retain loan interest to cover servicing costs. The bill also asks for public reporting on average interest rates charged under the programs and initially allowed a 15 percent administrative allowance to cover certain program expenses; senators amended that line to limit allowance to 5 percent.

Elektra Chidletsky, director of shared ownership at the Minnesota Consortium of Community Developers (MCCD), testified in support. MCCD — which has launched a subsidiary, Propagate, that intends to apply to DEED to operate one of the programs — told the committee the changes are intended to address inflation since 2023, improve transparency (including public reporting on average interest rates) and help nonprofit administrators cover costs. Chidletsky told the committee, “Without a higher administrative allowance, organizations will need to fundraise to cover these costs.”

Committee discussion focused on two technical and policy points: how the bill treats interest versus fee‑based lending (to accommodate alternatives such as Islamic financing) and the size of the administrative allowance. Carrie Johnson, identified in committee as a technical representative for the proponents, explained that administrators could charge either an interest rate (capped at the Wall Street Journal prime) or the fee equivalent — but not both — and said program language could be tightened to clarify amortization and term details. Committee members asked for follow‑up information about amortization, term, and whether rates are fixed or variable; Johnson said she would supply specifics and that some loan‑administration details would be clarified before the Commerce stop.

On the administrative allowance, Sen. Dreyheim offered an oral amendment lowering the percentage from 15 to 5 percent; the committee adopted that change by voice vote after members argued about historical norms (fiscal staff said many programs historically use about 5 percent). Sen. Nelson successfully moved a technical amendment to change language describing eligible administrative expenses so it read “including [listed items]” rather than “including but not limited to.” The committee first adopted the author’s A1 amendment to set the bill in its presented form and then, after testimony and discussion, approved the Dreyheim oral amendment and the Nelson technical amendment. The final motion to pass the bill as amended carried on a voice vote, and the bill was re‑referred to the Commerce Committee.

The committee record shows members requested follow‑up from DEED and from the nonprofit administrators on outstanding technical and implementation questions, including: whether the programs have launched, current repayment history, exact loan terms and amortization schedules, whether origination fees are separate from retained interest/fee amounts, and how nonprofit administrators anticipate covering costs at lower administrative rates.

The committee did not provide a roll‑call vote; outcomes were recorded by voice vote.

The bill will next be scheduled for the Commerce Committee, where proponents and agency staff expect to resolve remaining technical language.