S.B. 1118 — An Act Concerning Responsible and Equitable Regulation of Adult-Use Cannabis — would legalize possession and cultivation of cannabis for adults 21 and older and expunge thousands of past records. It replaces the unregulated illicit market with a taxed and regulated system of licensed cultivators, retailers, manufacturers, and delivery services and invests the bulk of tax revenues into disproportionately impacted communities. Half of new cannabis business licenses would be issued to social equity applicants, who could receive technical assistance, start-up funding, assistance from an accelerator program, and workforce training. S.B. 1118 also includes strong protections for public safety and deterrents for underage use.
The bill is sponsored by Sen. President Martin Looney and Speaker of the House Matt Ritter. It incorporates ideas from Gov. Ned Lamont’s S.B. 888, along with concepts from Rep. Robyn Porter’s H.B. 6377 (related to labor and equity) and input from lawmakers and advocates.
On June 7, the Senate approved the bill 19-17. It now heads to the House.
Personal Liberty and Possession Limits
Redresses Harms Caused by Prohibition and Unequal Enforcement
Protections to Prevent Underage Use
Penalties for Underage Possession
Individuals age 18 to 20:
Individuals under age 18:
Public Health and Safety
Clean Indoor Air:
1. Streetscape improvements and other neighborhood developments in communities where cannabis or hybrid retailers or micro-cultivators are located
2. Youth employment and training programs in these municipalities
3. Services for individuals living in these municipalities who were released from DOC custody, probation, or parole
4. Mental health or addiction services
5. Youth services bureaus
6. Community civic engagement efforts
License and Regulatory Structure
The Department of Consumer Protection would be charged with licensing and regulating cannabis businesses.
License Types and Numbers
No later than 30 days after the Social Equity Council identifies criteria and supporting documentation for social equity applicants, it may begin accepting applications from the following types of licenses:
2. hybrid retailer (which sells both adult-use and medical cannabis)
3. cultivator (which cultivate 15,000 square feet or more)
4. micro-cultivator (which start between 2,000 and 10,000 square feet)
5. product manufacturer
6. food and beverage manufacturer
7. product packager
8. delivery service
Before accepting applications, DCP will determine the maximum number of licenses of each type and post it on its website. Fifty percent of each license type are reserved for social equity applicants.
The department will establish the maximum grow space permitted by a cultivator and micro-cultivator. In doing so, it will seek to ensure an adequate supply.
On-site consumption is not initially allowed. By January 1, 2023, DCP will made recommendation on whether to authorize on-site consumption or events that allow cannabis usage.
DCP will begin accepting applications from dispensaries to covert to also serve adult-use starting on September 1, 2021. To become a “hybrid retailer,” a dispensary must:
Existing Producers (Grower/Processors)
Sometime after July 1, 2021, DCP can authorize producers to also produce cannabis for adult use. To convert to also serve adult use, producers must:
Licensing Fees — Social Equity
Fees paid by social equity applicants who enter the lottery are 50% lower than the open licensing fees. They are:
1. A retailer or hybrid retailer fee to enter the lottery is $250, the fee for a provisional license is $2,500, and the fee for a final license or renewal is $12,500;
2. A cultivator fee to enter the lottery is $500, the fee for a provisional license is $12,500, and the fee for a final license or renewal is $37,500;
3. A micro-cultivator fee to enter the lottery is $125, the fee for a provisional license is $250, and the fee for a final license or renewal is $500;
4. A product manufacturer fee to enter the lottery is $375, the fee for a provisional license is $2,500, and the fee for a final license or renewal is $12,500;
5. A food and beverage manufacturer fee or delivery service fee to enter the lottery is $125, the fee for a provisional license is $500, and the fee for a final license or renewal is $2,500; and
6. A product packager fee to enter the lottery is $250, the fee for a provisional license is $2,500, and the fee for a final license or renewal is $12,500.
Licensing Fees — Open Licensing
Fees paid by other cannabis applicants and licensees are:
1. A retailer or hybrid retailer fee to enter the lottery is $500, the fee for a provisional license is $5,000, and the fee for a final license or renewal is $25,000;
2. A cultivator fee to enter the lottery is $1,000, the fee for a provisional license is $25,000, and the fee for a final license or renewal is $75,000;
3. A micro-cultivator fee to enter the lottery is $250, the fee for a provisional license is $500, and the fee for a final license or renewal is $1,000;
4. A product manufacturer fee to enter the lottery is $750, the fee for a provisional license is $5,000, and the fee for a final license or renewal is $25,000;
5. A food and beverage manufacturer, delivery service, or transporter fee to enter the lottery is $250, the fee for a provisional license is $1,000, and the fee for a final license or renewal is $5,000; and
6. A product packager fee to enter the lottery is $500, the fee for a provisional license is $5,000, and the fee for a final license or renewal is $25,000.
Licensing Fees — Staff and Backer
The license fee for a backer or key employee is $100; employee registrations for others are $50.
Individuals are disqualified from owning a cannabis establishment if they have a conviction within the last 10 years for money laundering, vendor fraud, insurance fraud, forgery, filing a false record, bribery, witness tampering, perjury, false statement on a certified payroll, bribery of a labor official, bribery of commercial bribe, receiving kickbacks, paying kickbacks, rigging, telephone fraud, identity theft, or willful tax evasion in any state.
Licensing By Lotteries, With Social Equity First
If the application period for a license type closes and DCP received more than the maximum number of applications, a third-party lottery operator must conduct a lottery to select applications for DCP review.
The vast majority of new licenses will be issued by lottery. This provides an equal chance to all qualified applicants and avoids requiring unsuccessful applicants to spend large sums of money to apply. The lottery may include multiple separate geographic lotteries.
The lottery for social equity applicants is first. At least 50% of each new license type will be issued to social equity applicants. After that, a second lottery will include both unsuccessful social equity applicants and any other applicant.
In the lottery, every entrant will get a numerical ranking, including those who are not initially selected. After the lottery selects applicants, the Social Equity Council will verify that the winners qualify as a social equity applicant — without having any identifying information. If an applicant does not qualify, they will be entered into the open lottery provided they pay the other half of the lottery fee. For any applicant that does not qualify, the lottery operator will identify the next-ranked applicant who will then be reviewed.
The bill requires that all applicants selected in the lottery and not disqualified be provided a provisional license application.
Applicants must complete their applications within 60 days after they receive it, and the right to apply for a provisional license is nontransferable.
A provisional license expires after 14 months and is not renewable. A provisional licensee may apply for a final license during the initial application period. Final license application requires:
1. A contract with an approved seed-to-sale vendor in accordance with the bill’s provisions;
2. A right to occupy the location where the cannabis establishment will be located;
3. Any necessary local zoning approval for the cannabis establishment;
4. A social equity plan;
5. A workforce development plan;
6. Written policies for preventing diversion and misuse of cannabis and sales to underage persons;
7. All other security requirements set forth by the department based on the specific license type;
8. A labor peace agreement entered into between the cannabis establishment and a bona fide labor organization; and
9. A certification that they are using a project labor agreement for construction projects of $5 million or more.
Only cannabis establishments with approved final licenses can begin operations.
Social equity licenses cannot change ownership to non-social equity applicants until three years after final licensure, except in specific cases such as death or illness.
Additional Cultivation License(s)
Social Equity and Industry Inclusion
Within 45 days after bill passage, the Social Equity Council must establish criteria for proposals for an independent third party to conduct a study addressing the following issues, in relation to Connecticut:
1. Historical and current social, economic, and familial consequences of cannabis prohibition, the criminalization and stigmatization of cannabis use, and related public policies;
2. Historical and current structures, patterns, causes, and consequences of intentional and unintentional racial discrimination and disparities in the development, application, and enforcement of this prohibition and related public policies;
3. Foreseeable long-term social, economic, and familial consequences of unremedied past racial discrimination and disparities arising from past and continued cannabis prohibition, stigmatization, and criminalization;
4. Existing patterns of racial discrimination and disparities in access to entrepreneurship, employment, and other economic benefits arising in the state’s medical marijuana sector; and
5. Any other matters that the council deems relevant and feasible to study for making reasonable and practical recommendations for establishing an equitable and lawful adult-use cannabis business sector.
By January 1, 2022, taking into account the study’s results, the Social Equity Council must make recommendations to the governor and the General Law, Judiciary, and Finance, Revenue and Bonding committees for legislation to implement these social equity provisions. The recommendations must address:
1. Creating programs to ensure that individuals from disproportionately harmed communities have equal access to cannabis establishment licenses;
2. Specifying additional qualifications for social equity applicants;
3. Providing for expedited or priority license processing for social equity applicants for retailer, hybrid retailer, cultivator, micro- cultivator, product manufacturer, food and beverage manufacturer, product packager, and delivery service licenses;
4. Establishing minimum criteria for cannabis establishments licensed on or after January 1, 2022 that are not owned by a social equity applicant to comply with an approved plan to reinvest or provide jobs and training opportunities for individuals in disproportionately affected communities;
5. Establishing a social equity plan for any cannabis business licensed on or after January 1, 2022;
6. Recruiting individuals from these communities to the workforce training program established under the bill;
7. Potential uses for revenue generated under the bill to further equity;
8. Encouraging participation by investors, cannabis establishments, and entrepreneurs in the cannabis business accelerator program established under the bill;
9. Establishing a process to best ensure that social equity applicants have access to the capital and training needed to own and operate cannabis establishments; and
10. Developing a vendor list of women- and minority-owned businesses that cannabis establishments may contract with for necessary services, such as office supplies, information technology infrastructure, and cleaning services.
The Social Equity Council, by October 1, 2023, is required to report to the governor and Judiciary Committee on arrest and conviction data for cannabis possession, including a breakdown by town, race, gender, and age.
Protecting Medical Cannabis Patients