CanStartup Program

The CanStartup Program is a competitive grant initiative administered by the Minnesota Department of Employment and Economic Development (DEED), the state’s principal agency responsible for economic growth, workforce development, and business expansion. Established pursuant to Minnesota statute, the program is designed to support the development of the legal cannabis industry by financing new cannabis microbusinesses. DEED’s broader mission to promote inclusive economic development is reflected in this program’s emphasis on equitable access to capital and job creation, particularly in communities historically impacted by cannabis-related enforcement policies. The primary purpose of the CanStartup Program is to provide grant funding to qualified nonprofit corporations so they can originate and service loans to new cannabis microbusinesses. These loans are intended to help early-stage businesses that may not otherwise secure traditional financing, thereby enabling them to launch and grow within Minnesota’s regulated cannabis market. A key objective of the program is to support job creation and economic activity in communities where long-term residents are eligible as Social Equity Applicants. Priority is given to businesses owned by individuals who meet specific social equity criteria, including those affected by prior cannabis-related convictions or those residing in economically disadvantaged areas. Grant funds awarded under this program must be used by nonprofit grantees to establish and operate revolving loan funds. These funds will provide capital to eligible cannabis microbusinesses, with loan principal repayments returned to the state-managed revolving account. Interest earned on loans may be retained by the nonprofit for administrative and operational expenses related to loan servicing and technical assistance. Allowable uses of grant funds include loan origination, servicing, and administrative costs such as legal, accounting, and financial support services. However, funds may not be used for ineligible expenses such as fundraising, lobbying, or out-of-state travel. Eligibility for this funding opportunity is restricted to nonprofit corporations that meet several requirements, including maintaining good standing with the Minnesota Secretary of State, the Internal Revenue Service, and, where applicable, the Minnesota Attorney General’s Office. These organizations must demonstrate the capacity to manage loan portfolios, engage with community stakeholders, and provide technical assistance to borrowers. Additionally, applicants must submit a complete application package that includes organizational documentation, financial records, loan policies, and an outreach plan detailing how they will expand lending activities within Minnesota. Applications must be submitted through a web-based platform and include all required exhibits and supporting documentation. The submission process requires completion of an online application form along with multiple attachments such as organizational history, capacity responses, certifications of compliance, financial statements, and detailed loan program documentation. Incomplete applications or those that include unrequested materials will be rejected. Applicants are responsible for ensuring the accuracy and completeness of their submissions, as any misleading information may result in disqualification or legal consequences. The evaluation process is conducted by a review panel of subject matter experts who assess proposals based on four equally weighted criteria: organizational background and experience, capacity to manage a loan portfolio, performance and reporting capabilities, and community engagement strategies. Applications are scored on a 100-point scale, and final award decisions are made by the Commissioner of DEED. The program operates on a defined timeline, with applications opening on June 15, 2026, and closing on July 27, 2026. Review and award decisions follow in August and September, with grant activities anticipated to begin in mid-September 2026. The grant cycle aligns with a broader funding period authorized through 2029, and awarded projects are expected to comply with ongoing reporting, auditing, and monitoring requirements. Grantees must submit quarterly and annual reports, maintain detailed financial records, and undergo independent audits. While the program does not explicitly state recurring annual solicitations, it is tied to multi-year legislative appropriations, suggesting potential future funding rounds. For inquiries, applicants may contact the program via email, and technical assistance is provided through posted responses to submitted questions.

Align proposal with scoring criteria including loan management capacity, community engagement, and reporting capabilities; ensure all required attachments are complete and accurate as incomplete applications are rejected