Connecticut legalized adult-use cannabis last year, but it’s still unclear when recreational marijuana will be available to buy without a prescription.
Existing medical-use cultivators and retailers could be the first to offer recreational products in the market, but only a handful have applied so far to convert their operations to a “hybrid” model — producing or selling both medical and recreational pot.
Under the law, the fee to convert is $1 million for retailers and $3 million for producers, which could be prohibitive for many businesses. That rate is discounted for operators who form 50/50 “equity joint venture” partnerships with a person or business that meets certain income or residency criteria.
Another potential hitch: retail sales can’t commence until there’s an aggregate of 250,000 square feet of grow and manufacture space in Connecticut that’s devoted to the adult-use market. Officials with the Department of Consumer Protection, which administers licensing, are working with producers to track the industry’s footprint as many medical-use cultivators expand their operations.
On its website, the department explains: “The supply chain must be entirely licensed before sales can begin, including stores, testing labs, and growers, and there must be enough growing capacity to supply the retail market.”
State officials say their goal is for adult-use marijuana products to be available for sale by the end of this year or early next year, but there’s no set date.
Hopeful new entrants to the market, from growers to product manufacturers, transporters, retailers and delivery services, are currently in the midst of a lottery process for licenses. Fewer than 50 are available across nine categories, with half going to “social equity” applicants and half to general applicants. The public will be notified as licenses are granted.
But lottery winners will still have to undertake the task of getting a cannabis business up and running. That’s no small feat in a highly regulated industry, especially for start-up entrepreneurs.
“This is a heavy cash-investment business,” said Andrea Comer, deputy commissioner of the Department of Consumer Protection. “What we don’t want to do is have people set up to fail by saying, ‘OK, you want a license? Here you go.’ And then they’re ill-equipped to build or sustain that business.”
The state’s 15-member Social Equity Council, responsible for promoting diverse participation in the developing new industry, has been holding a series of workshops for people interested in obtaining licenses and starting a cannabis business. The state also plans to offer technical assistance to cannabis entrepreneurs. Earlier this month, the council put out a request for proposals from “qualified independent organizations and individuals to set up a comprehensive cannabis accelerator program.”
Interested applicants have raised questions of fairness in the licensing process. Some argue the conversion fees for medical producers and retailers restrict access to large companies that have millions of dollars to spare. Some point out that the lotteries favor those who entered multiple times and paid multiple fees — $500 for general applicants and $250 for social equity enterprises — to gain an advantage. (Thousands of applications have been submitted across the eight lotteries.)
Comer said incentives were built into the law to favor social equity applicants and equity joint ventures, by discounting the fees for those applicants. She added that people shouldn’t overlook other important components of the law, including the decriminalization of marijuana and reinvestment in the communities most impacted by discriminatory federal drug policy — the “long game,” as she called it.
“A portion of the proceeds from these license fees are going to go into a fund that is then reinvested in communities, specifically the communities that have been designated as disproportionately impacted by the War on Drugs,” Comer said. Communities might put the funds toward helping entrepreneurs in other sectors, for example, or supporting workforce development programs, she said.
As of last July, adults in Connecticut may possess and use up to 1.5 ounces of marijuana legally, and they may store up to 5 ounces in a locked container at home.
Until the adult-use market opens, only medical marijuana patients and their caregivers may purchase marijuana from the state’s 18 licensed dispensaries. Some regulations on medical cannabis have expanded since the adult-use bill passed last year. Medical marijuana patients can now purchase up to 3.5 ounces a month from any dispensary; they no longer have to select a designated facility.