To operate in Connecticut’s adult use cannabis market, most people will have to win a license through the lottery – a long shot particularly for more popular license types such as retail.
But the state’s cannabis law provides several exceptions to that process including for equity applicants interested in growing marijuana. Those applicants must meet certain income and residency requirements. The goal is to provide people who were targeted by the past criminalization of marijuana with an opportunity to get into the legal industry.
The state received 41 applications for social equity cultivator licenses, which are reserved for equity applicants who want to operate grow facilities in one of the disproportionately impacted areas identified by the state. The areas, which tend to be urban and low-income, were identified based on past cannabis convictions and unemployment rates.
There’s no limit to the number of the social equity cultivator licenses the state can issue so technically any applicant who meets the criteria could get one. If selected, applicants must pay $3 million for a provisional license.
New Haven resident Kebra Smith-Bolden, 45, is among those seeking a social equity cultivator license. She has partnered with national marijuana operator Acreage Holdings, Inc., which owns three existing medical dispensaries in the state, to open a grow facility in New Haven.
“I’m from New Haven so it’s my desire to create jobs and opportunities there,” Smith-Bolden said.
She has already identified a site in the city where she’d like to operate her grow facility — not an easy task given the facility must be in a disproportionately impacted area, which she said are primarily residential neighborhoods where the availability of land is limited. The state’s cannabis law stipulates that a cultivation facility must contain at least 15,000 square feet of grow space.
Many cities and towns throughout the state have moved, at least temporarily, to ban cannabis establishments within their borders, complicating the process of finding a site.
Smith-Bolden would own 65 percent of the cultivation operation, once established, as required by law. She and Acreage are also seeking an equity joint venture license to open a dispensary in New Haven. In 2020, Massachusetts marijuana regulators fined Acreage $250,000 over allegations that the company attempted to exceed the state’s license cap, according to the Boston Globe.
In Connecticut, equity joint ventures are partnerships between existing medical marijuana producers or dispensaries and equity applicants that must be 50 percent owned by an equity applicant. Smith-Bolden said she would own 51 percent of the dispensary once opened. Between the dispensary and grow facility, she said she expects to create more than 100 jobs. Under the workforce development plan she submitted to the state, Smith-Bolden said she and Acreage have “committed to support and engage with over 11 local organizations in New Haven.”
Smith-Bolden, who is the CEO of CannaHealth, has been referred to as the “Marijuana Guru in CT.” Still, she said she found it difficult to navigate the application process.
“I needed lawyers,” she said. “I needed people to help guide me through the process.”
She said she’d hoped she wouldn’t have to partner with a multi-state operator but requirements under the law made that an unrealistic proposition. “To be a social equity applicant, you could not have made more than $236,000 but are expected to come up with a $3 million licensing fee,” she said.
An equity applicant is a person who grew up in or has lived in recent years in a disproportionally impacted area, typically urban and low-income, and had no more than $235,400 in average income over the last three years.
The accounting firm CohnReznick is reviewing the 41 applications for social equity cultivator licenses, following the three-month application period, which closed on May 3. The social equity council hired the firm to determine whether applicants comply with all the requirements. The council will also conduct its own review of the applications once CohnReznick is finished with its work.
The firm will also review applications for equity joint ventures and social equity applicants for any of the cannabis licenses selected through the lottery.
Andréa Comer, deputy commissioner of the state Department of Consumer Protection and chair of the social equity council, said CohnReznick is expected to complete its review of the equity cultivator applications by the end of June and will submit a report to the council. Once complete, the council will begin its vetting of the applicants.
julia.bergman@hearstmediact.com
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