By: Ryan M. Holz, Partner andDavid Standa, Partner
On Tuesday Connecticut regulators announced that the Department of Consumer Protection will start accepting certain marijuana business license applications at the beginning of February. The announcement comes after Connecticut’s Social Equity Council (SEC) approved an assistance plan for people interested in participating in the legal cannabis market. The creation of the plan was a necessary condition to trigger the start of the licensing process under the Responsible and Equitable Regulation of Adult-Use Cannabis Act (the “RERACA”) signed by Governor Lamont last year.
The timeline for each type of licensee varies and is set forth below. Each application window will be open for 90 days, and at the close of the window, there will then be two separate lotteries to determine license winners – a general lottery and a social equity lottery. Based on the information released thus far, it is not entirely clear if there is a minimum qualification threshold required to be entered into the lottery, but there does not appear to be. What is clear, however, is that submitting in the beginning of the 90 day window does not provide any advantage to applicants – all qualified applicants submitting within the window will be entered into the same lottery.
The social equity lottery will be conducted first. Once the winners are selected, the SEC will be charged with ensuring that those selected through the lottery process meet the applicable standards, which means at a minimum for social equity applicants there must be at least 65 percent ownership or control of the business by people who meet the income and residency requirements for a social equity applicant outlined in the RERACA. The other requirements to satisfy the social equity standard are available here . Andréa Comer, DCP deputy commissioner and chair of the SEC, believes it “will be a huge task” to vet the applications for those selected through the lottery. After the social equity lottery, the general lottery will be conducted. Social equity applicants that did not win in the social equity lottery will be entered into the general lottery along with all non-social equity applicants.
There is also an opportunity to skip the lottery for cultivation applicants who are able to satisfy certain requirements and locate their facility within a “Disproportionately Impacted Area.” However, that process comes with a hefty $3 million price tag that many applicants are unlikely to shell out, but if you are interested in that particular license type, the Disproportionately Impacted Areas have been identified here .
The opening and closing dates for the various license types are as follows with the aforementioned cultivator and retailer licenses opening first on February 3, 2022:
Disproportionately Impacted Area Cultivator: February 3, 2022 (non-lottery)
Retailer: February 3, 2022 (closing May 4, 2022)
Micro-cultivator: February 10, 2022 (closing May 11, 2022)
Delivery Service: February 17, 2022 (closing May 18, 2022)
Hybrid Retailer: February 24, 2022 (closing May 25, 2022)
Food and Beverage: March 3, 2022 (closing June 1, 2022)
Product Manufacturer: March 10, 2022 (closing June 8, 2022)
Product Packager: March 17, 2022 (closing June 15, 2022)
Transporter: March 24, 2022 (closing June 22, 2022)
In addition to setting the application windows, the DCP also finalized how many licenses will be awarded for each license type for both the general and social equity categories:
Retailer: 6 general licenses, 6 Social Equity licenses
Micro-cultivator: 2 general licenses, 2 Social Equity licenses
Delivery Service: 5 general licenses, 5 Social Equity licenses
Hybrid Retailer: 2 general licenses, 2 Social Equity licenses
Food and Beverage: 5 general licenses, 5 Social Equity licenses
Product Packager: 3 general licenses, 3 Social Equity licenses
Product Manufacturer: 3 general licenses, 3 Social Equity licenses
Transporter: 2 general licenses, 2 Social Equity licenses
The applications have not yet been released but that is expected to happen shortly, and we are encouraging our clients to start prepping for what is going to be a short timeframe for submission. If you have any questions or would like more information on what Greenspoon Marder LLP can do to assist you in applying in Connecticut, please contact Ryan Holz (ryan.holz@gmlaw.com ) or David Standa (david.standa@gmlaw.com ).
