Cannabis cultivation in CT could be linked to big money investors. Experts say that ‘should be no surprise.’

Cannabis-cultivation-

Before aspiring businesses in Connecticut can begin selling cannabis, thousands of square feet of the plant must flourish in cultivation facilities. Initial reactions to the news concerning these entrepreneurs have been divided. Despite a rigorous procedure that evaluated early businesses seeking to cultivate cannabis in the state, some members of the state’s cannabis industry are concerned about the corporations’ commercial and political connections.

Others, however, contend that these concerns miss the realities of the cannabis sector, which is on the verge of tremendous expansion. “Folks with capital are interested in this industry — it’s a billion dollar industry that is on the brink of going federally legal,” said DeVaughn Ward, senior legislative counsel for the Washington, D.C.-based nonprofit Marijuana Policy Project.

This month, the state Department of Consumer Protection released the names of the sixteen candidates for so-called social equity growing licenses who were pre-approved by the state cannabis equity council. If they receive final licenses from DCP, these applicants may be among the first cannabis cultivators in the state.

The state created stringent standards for these so-called social equity cultivators, which must be owned by Connecticut entrepreneurs from “disproportionately impacted areas.” State law stipulates that these locations must have “a historical conviction rate for drug-related offenses greater than one-tenth or a rate of unemployment greater than ten percent.”

According to DCP, the social equity process is but one pathway to cannabis licensing. Potential cultivators had three months to submit a single application for these individual licenses. The law also puts an annual income cap on applicants for social equity. They cannot earn more than three times the median household income in Connecticut.

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Moreover, the candidate for social equity must hold at least 65 percent of the agriculture firm. Some social equity growers are associated with a handful of prominent personalities, some as applicants and others as investors. Tiana Hercules, a member of the Hartford City Council, is the social equity applicant for one of the initiatives using Ayr Wellness and cannabis.

Art Linares, the former state senator, and spouse of Stamford Mayor Caroline Simmons, is a financial backer for one of the other firms. “The fact that these licenses are connected to folks who have means — it should be no surprise,” Ward added. “These are huge, capital-intensive endeavors.”

Understanding the application procedure

The state contends that these prominent names did not affect the procedure. The group that handles Connecticut’s cannabis equity initiatives, the Social Equity Council, informed Hearst Connecticut Media that it has a detailed, and at times blind, the procedure for evaluating these applicants.

“The council took their responsibility very, very seriously,” according to the executive director of the council, Ginne-Rae Clay. “Folks think that much of this was being done in back offices.” According to the DCP, 41 companies have applied for social justice cannabis growing permits. The firm CohnReznick analyzed all of the applicants’ paperwork, which was given to the Social Equity Council without any identifying information.

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Clay stated that the CohnReznick advisors are from out of state and “do not know any of the applicants.” DCP Deputy Commissioner Andréa Comer said that the Social Equity Council was also quite concerned with achieving “true ownership” among the social equity applicants. Additionally, Comer chairs the Social Equity Council.

Cannabis cultivation in CT could be linked to big money investors. Experts say that 'should be no surprise.'

“True ownership means that the social equity applicant will control the board votes and the management decisions,” she explained. Long-term ownership of these firms by residents in disproportionately disadvantaged communities was a top priority for the council. Despite these protections, some cannabis supporters are skeptical of the social equity cultivator announcement.

Director of the New England Craft Cannabis Alliance Joseph Raymond Accettullo stated, “I think … certain people are more prepared to be able to fill out the extensive application work,” Accettullo is an advocate for current cannabis producers, which he believes were excluded from the social equity application process due to prohibitive licensing fees.

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In Connecticut, the social equity licensing fee costs $3 million, a fact that industry professionals have analyzed throughout 2022. Accettullo is among them, and his complaints about the application process for social equity are not novel. Even with the rigorous restrictions on who qualifies as a social equity applicant, he argues that the state must reduce licensing fees in order to more effectively target those harmed by the War on Drugs.

Legal marijuana in Connecticut: A timeline

Looking long term

Ward, who is located in Connecticut, explained that the fact that prominent figures are involved does not indicate that the system is not achieving its goals. “I do know Black men and Black women who were awarded these licenses and are exactly who the legislature was trying to attempt to get one of these opportunities to,” he said.

Moreover, according to Ward, the current public information does not adequately identify the social equity applicants. A social equity cultivator, for instance, may have numerous social equity applications inside the structure as a whole. Even though paperwork from the Secretary of State’s office show in broad strokes who are participating in a corporation, according to DCP, more precise information will become available once all applicants receive final clearance.

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Ward stated that the success of Connecticut’s social equity pipelines could not be determined based on rough sketches of what the business will look like prior to cannabis cultivation and industry success (or failure). “(The state) still has other licenses to roll out, you know?” Ward said. “This is really premature.”

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