Gov. Ned Lamont’s 2021 proposal to end cannabis prohibition – S.B. 888 – would replace the unregulated illicit market with a taxed and regulated system of licensed cultivators, retailers, manufacturers, and delivery services. The bill also includes strong protections for public safety and deterrents for underage use. It directs an Equity Commission to develop equity-related recommendations by November 2021.

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Personal Liberty and Possession Limits

• Allows adults 21 and over to:
  • possess up to 1.5 ounces of cannabis or an equivalent amount of cannabis products or concentrates; and
  • possess up to five ounces of cannabis or an equivalent amount in a locked container in the person’s residence.
  • Equivalency: One ounce of cannabis is considered equivalent to five grams of cannabis concentrate or any other cannabis product with up to 500 milligrams of THC.
• Decriminalizes possession of fewer than four ounces, imposing a civil fine instead of possible jail time.
• Allows adults 21 and over to gift cannabis, within legal limits, to each other.
• Starting May 4, 2022, allows qualifying medical marijuana patients to cultivate up to six cannabis plants in their homes, as long as they keep the plants secure from unauthorized access or access by anyone under age 21.
• By January 1, 2023, requires the Department of Consumer Protection (DCP) to make written recommendations to the governor and the legislature on whether to allow home-grown cannabis or on-site consumption or events that allow cannabis usage.
• Legalizes possession and use of cannabis paraphernalia.
• Decriminalizes first offense of illegally manufacturing, selling, or possessing with intent to sell up to eight ounces or six cannabis plants in one’s residence.
• Eliminates odor of cannabis or burnt cannabis as a basis to stop or search.
• Eliminates suspected possession or possession of up to four ounces as a basis to stop or search.
• Prohibits prosecution for sale or possession when seeking medical assistance.
• Prohibits smoking, inhaling, or ingesting marijuana while driving or riding in a motor vehicle.

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Redresses Harms Caused by Prohibition and Unequal Enforcement

• Beginning January 1, 2022, prohibits state-legal cannabis possession or use from being grounds for revoking parole, special parole, or probation.
• Beginning January 1, 2022, DCP must return seized paraphernalia and drugs that do not violate the law.
• Beginning July 1, 2022, individuals can petition for erasure of prior convictions for possession, drug paraphernalia, and sale and manufacture of four or fewer ounces or six or fewer plants.
• Beginning July 1, 2023, provides for automatic erasures of convictions from January 1, 2000 through September 15, 2015 for possession of fewer than four ounces.
• Prohibits landlords and property managers from:
  • refusing to rent to, or otherwise discriminating against, an existing or prospective tenant based on a past conviction in Connecticut for possessing specified amounts of cannabis, or in another jurisdiction for possessing four or fewer ounces of cannabis.
  • banning non-inhaled use of cannabis at one’s rental home.
• Institutions of higher education may not deny individuals financial aid, student loans, or expel a student solely for possessing four or fewer ounces of cannabis.
• Prevents the following actions based on an individual testing positive for cannabis metabolites:
  • a person being denied organ transplants or other medical care, unless there is an evidence-based reason;
  • adverse action being taken by the Department of Children and Families, absent a risk of harm to the child; or
  • failing to give students educational opportunities, absent a federal requirement.

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Protections to Prevent Underage Usage

• Prohibits cannabis establishments from advertising in ways that target those under age 21.
• Imposes penalties on cannabis retailers or hybrid retailers who allow underage individuals to loiter or enter certain parts of the establishment.
• Makes selling to underage persons a class A misdemeanor.
• Cannabis establishment licensees who sell or deliver cannabis or cannabis products to people under age 21 are guilty of a class A misdemeanor, punishable by up to one year in prison, a fine of up to $2,000, or both.
• By January 1, 2023, requires the Alcohol and Drug Policy Council to make recommendations to the governor and legislature on efforts to promote public health and science-based harm reduction, mitigate misuse and the risk of cannabis addiction, and effectively treat cannabis addiction with a particular focus on individuals under age 21.
• The bill requires the Department of Public Health, starting in the 2022-23 school year, to administer the Connecticut School Health Survey every two years to students in grades nine to 12.
• Makes it a class A misdemeanor for someone in control of a home or private property to allow someone under age 21 to possess cannabis there.

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Penalties for Underage Use

Individuals age 18 to 20:

• 1st offense: $50 fine, except the fine is waived if the individual attests to his or her indigence.
• 2nd offense or subsequent: $150 fine, or as an alternative, the individual may perform six hours of community service for a private, nonprofit charity or other nonprofit organization (if the individual chooses community service, he or she must attest to completing that service and present confirming documentation).
• View and sign a statement acknowledging the health effects of cannabis on young people.
• 60-day suspension of the driver’s license or nonresident operating privilege for anyone under age 21 convicted of possessing any amount of cannabis.

Individuals under age 18:

• 1st offense: a written warning and possible referral to a youth services bureau or other appropriate services.
• 2nd offense: mandatory referral to a youth services bureau or other appropriate services.
• 3rd offense: adjudicated as delinquent in juvenile court.
• 60-day suspension of the driver’s license or nonresident operating privilege for anyone under age 21 convicted of possessing any amount of cannabis.

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Local Controls

• Prohibits host community agreements by municipalities, which have been detrimental to equity in Massachusetts.
• Allows municipalities to prohibit cannabis establishments from opening within their jurisdiction.
• Prohibits municipalities from banning cannabis delivery.
• Allows municipalities to reasonably restrict cannabis establishments’ hours and signage.
• Allows municipalities to reasonably restrict cannabis establishments’ number or density and sets a maximum of one retailer per 5,000 residents, as determined by the most recent census.
• Allows municipalities to restrict cannabis establishments’ proximity to religious institutions, schools, charitable institutions, hospitals, veterans’ homes, or certain military establishments.
• Allows municipalities, upon petition of 10% of their voters, to hold a local referendum on whether to allow the recreational sale of marijuana.
• Allows municipalities, for the first 30 days after cannabis retailers or hybrid retailers open, to charge up to $50,000 for reasonable municipal costs for public safety services related to the opening (such as for directing traffic).
• Allows municipalities to establish fines for cannabis smoking in outdoor sections of restaurants.

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Public Health and Safety

Clean Indoor Air:

• Adds cannabis smoking and vaping to the areas where tobacco is restricted under the Clean Indoor Air.
• Expands the Clean Indoor Air Act’s ban on smoking and using e-cigarettes to include “any area” of a facility, building, or establishment, including outside areas that are within 25 feet of a doorway, operable window, or air intake vent, in addition to the premise’s interior, and “any area” of a retail establishment accessed by the public.
• Bans smoking and e-cigarette use in workplaces, regardless of the number of employees.

Road Safety:

• Requires Police Officer Standards and Training Council (POST) and Department of Transportation (DOT) to increase the number of officers to be trained in advanced roadside impaired driving enforcement (ARIDE).
• Increases access to ARIDE training and drug recognition expert (DRE) training for police officers and law enforcement units.

Public Health:

• Beginning in fiscal year (FY) 2024, 15% of cannabis excise tax revenue will be dedicated to prevention and recovery services for the mental health and addiction services commissioner to use to provide community-based grants for substance abuse prevention, treatment, and recovery services.
• Directs the Commissioner of the Department of Consumer Protection to craft health, safety, and security requirements, including:
  • prohibiting products designed to appeal to children;
  • restricting advertising, including banning ads with an audience that is more than 10% under the age of 21;
  • limiting servings to five mg of THC and requiring individual servings to be separate or demarcated;
  • requiring retailers to provide access to low-THC and high-CBD products;
  • prohibiting added flavoring to some cannabis products, including vaped products;
  • requiring consumer health materials to be posted or disseminated at retail locations, including printed health materials that shall be provided to all consumers under 25 at the point of sale;
  • labeling and packaging requirements, including a universal symbol and child-resistant packaging;
  • mandating lab testing and product tracking;
  • developing storage and transportation requirements and training and employment requirements; and
  • giving it (DCP) the authority to restrict dosage and potency and to restrict forms of cannabis products and delivery systems.

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Taxation

• The bill imposes an excise tax on the first sale or use of cannabis flowers, cannabis trim, or wet cannabis by a producer, cultivator, or micro-cultivator in the state.
  • The tax rate is $1.25 per dry-weight gram of cannabis flowers, $0.50 per dry-weight gram of cannabis trim, and $0.28 per gram of wet cannabis.
• In FY ‘22 and ’23, 100% of the excise tax would be directed to the General Fund.
• In FY ‘24, 55% of the excise tax would go to the cannabis equity and innovation account, 15% to the prevention and recovery services account described below, and 30% to the General Fund.
• Imposes a 3% municipal sales tax on the sale of cannabis and cannabis products that applies in addition to the state’s 6.35% sales tax. Medical cannabis is exempt. Municipal sales tax revenue must be used for one or more of the following:

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. Community civic engagement efforts.

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License and Regulatory Structure

Establishes a three-member Cannabis Control Commission to regulate cannabis licenses. The governor appoints two commissioners, and the DCP Commissioner serves as Chairperson. Governor fills any vacancy.

License Types

Starting July 1, 2021, the bill allows DCP to accept applications from social equity applicants for the following licenses:

1. retailer
2. hybrid retailer (which sells both adult-use and medical cannabis)
3. cultivator
4. micro-cultivator (which start at no more than 5,000 square feet)
5. product manufacturer
6. food and beverage manufacturer
7. product packager
8. delivery service

On the same date, DCP may also accept applications from (1) medical marijuana dispensary facilities to convert their license to a hybrid-retailer (which can also serve adults), and (2) medical marijuana producers for authorization to expand their license to engage in the adult-use cannabis market.

Starting January 1, 2024, DCP may accept applications from anyone for adult-use cannabis licenses.

License Fees

Existing medical businesses: The license conversion fee for a dispensary facility to become a hybrid retailer (which can serve adults) is $250,000. The license expansion fee for a producer to engage in the adult-use cannabis market is $750,000. Those fees are paid to the cannabis social equity account.

Fees paid by other cannabis applicants and licensees are:

1. A retailer or hybrid retailer fee or 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 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 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 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 is $25,000; and
5. A food and beverage manufacturer fee or delivery service fee to enter the lottery is $250, the fee for a provisional license is $1,000, and the fee for a final license is $5,000.

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.

Licensure Process

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 bill requires that all applicants selected in the lottery and not disqualified be provided a provisional license application.

Applicants must complete their application 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. Written policies for preventing diversion and misuse of cannabis and sales to underage persons;
6. All other security requirements set forth by the department based on the specific license type; and
7. A labor peace agreement entered into between the cannabis establishment and a bona fide labor organization.

Only cannabis establishments with approved final licenses can begin operations.   Under the bill, legal sales would begin May 4, 2022.

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Social Equity and Industry Inclusion

• DCP must reserve 40% of the maximum number of applications that must be considered for eligible license types for social equity applicants.
• Social equity applicants receive a 50% reduction of license fees.
• A “social equity applicant” is defined as an applicant for a cannabis establishment license that is either at least 51% owned by or under the day-to-day control of an individual or individuals who:
  • Have a prior arrest or conviction, as an adult or juvenile, for the sale, possession, use, manufacture, or cultivation of cannabis;
  • Have a parent, spouse, or child who has such an arrest or conviction;
  • Have been a resident of a disproportionately affected community for at least five of the 10 years immediately before applying for the license; or
  • Reside on tribal land.
  • In addition, these individuals’ primary addresses must have been in Connecticut for at least five years immediately before applying for the license.

Note: Leadership assures advocates that the final bill will not include the provision allowing for social equity qualification based on control — and not ownership.

• A “disproportionately affected community” is defined as either of the following:
  • One of the top 20 communities on the most recent Public Investment Community index prepared by the Office of Policy and Management (OPM) [this index ranks municipalities in descending order based on their relative need, according to specified criteria]; or
  • A census tract in any municipality whose unemployment rate, and percentage of town residents below the federal poverty level, is greater than the statewide rate and percentage respectively.
• Directs all revenue from medical cannabis license conversion fees to a Cannabis Social Equity Account. The Cannabis Control Commission must use the money for the cannabis business accelerator program and the workforce training program.
• Beginning in FY ‘24, 55% of the cannabis excise tax revenue will be directed to the Cannabis Equity and Innovation Account (CEIA). CEIA funds are for the following purposes:

1. Investing in programs that are located in or primarily serve residents of disproportionately affected communities, including adult education programs (including programs offered by Unified School District #1) and programs to assist individuals released from DOC custody, probation, or parole;
2. Providing grants to youth service bureaus and municipal juvenile review boards;
3. Funding workforce development and business incubator and accelerator programs that support social equity applicants and prospective applicants; and
4. Funding programs and services that promote and encourage economic opportunity and advancement of individuals from disproportionately affected communities.

• Establishes a 13-member Social Equity Council to be administered by the Cannabis Control Commission — seven legislative appointments, two governor appointments, and the commissioners of DCP, Department of Revenue Services (DRS), Department of Economic Community Development (DECD), and Office of Policy and Management (OPM). The governor’s appointees serve four-year terms, and the other appointees serve three-year terms.

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 November 15, 2021, taking into account the study’s results, the 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. Recruiting individuals from these communities to the workforce training program established under the bill;
6. Developing an objective scoring system for evaluating final license applications to ensure cannabis establishments are furthering equity;
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 bill also authorizes up to $50 million in state general obligation bonds for the Department of Economic and Community Development and the Cannabis Control Commission to use for specified financial assistance and workforce training programs.
• Requires the Social Equity Council, by October 1, 2023, 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.
• Expands the Angel Investor Tax Credit to allow investors to claim a 40% income tax credit for credit-eligible investments in these businesses, imposes a $15 million per fiscal year cap on these credits, and increases the total credits allowed under the program to $20 million per fiscal year.
• Establishes a Cannabis Business Accelerator program to provide technical assistance to accelerator licensees by partnering accelerator licenses with a cannabis establishment.

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Protecting Medical Cannabis Patients

• Allows medical marijuana patients to grow up to six cannabis plants in their homes, if they keep them secure from unauthorized access or minors.
• Allows patients and caregivers to possess up to five ounces of marijuana.
• Prohibits hybrid retailers (that serve adults and medical patients) from converting to serve adult-use patients only outside of lottery process.
• Starting September 1, 2021, the bill permits dispensary facilities and hybrid retailers to apply to DCP to provide delivery services to qualifying patients and caregivers (1) using their own employees or an available delivery service, and (2) delivering marijuana only from their own inventory.
• Starting October 1, 2021, the bill eliminates current law’s requirement that qualifying patients (or parents or guardians of patients who are minors) designate a dispensary facility or hybrid retailer as their exclusive location to purchase medical marijuana.
• Before June 30, 2022, prohibits the department from approving a dispensary relocation that is further than 10 miles from the current location.
• Until June 30, 2023, allows DCP to deny a change of location for a dispensary facility or hybrid retailer because of patient needs.
• Requires hybrid retailers (medical dispensaries that can also serve adult-use consumers) to (1) maintain a licensed pharmacist on-site when the retail location is open to the public or to qualifying patients and caregivers, (2) include a space for pharmacists to hold private consultations with qualifying patients and caregivers, (3) provide an approved medical cannabis preservation plan to ensure against supply shortages of medical marijuana product, and (4) accommodate an expedited entry method that allows priority entrance for qualifying patients and caregivers.

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