Connecticut Cannabis Establishment License
Connecticut Cannabis Establishment License: How to Apply
In February of this year, Gov. Ned Lamont proposed a legislation that would permit the sale and possession of recreational marijuana in Connecticut, starting in 2022 and relying on the existing infrastructure of medical cannabis producers and dispensaries for a fast start while also offering opportunity to newcomers.
Gov. Lamont’s 2021 proposal – S.B. 888 — would legalize possession up to one and a half ounces for persons over the age of 21, with legal sales beginning on May 2, 2022. The bill would also decriminalize possession of up to two and a half ounces. Persons with convictions for cannabis possession under four ounces prior to October 1, 2015 would have their records automatically expunged. Persons with possession convictions for less than four ounces after October 1, 2015 would be allowed to petition the court for expungement at no cost.
Under the bill, an Equity Commission would be charged with developing recommendations by November 15, 2021 on a number of issues, including qualifications for equity applicants and distribution of a portion of tax revenues to support residents in communities disproportionately harmed by cannabis prohibition.
Types of Connecticut Cannabis Establishment Licenses
According to S.B. 888, there would be eight types of Connecticut cannabis establishment licenses, namely:
- Hybrid retailer
- Product manufacturer
- Food and beverage manufacturer
- Product packager
- Delivery service
Fees to apply for a Connecticut Cannabis Establishment License
Each Connecticut cannabis establishment license established in S.B. 888 has their own application fee, although as this is only the proposed legislation, there may be changes in the future:
- Retailer fee to enter the lottery shall be five hundred dollars, the fee to receive a provisional license shall be five thousand dollars and the fee to receive a final license shall be twenty-five thousand dollars.
- Hybrid retailer fee to enter the lottery shall be five hundred dollars, the fee to receive a provisional license shall be five thousand dollars and the fee to receive a final license shall be twenty-five thousand dollars.
- Cultivator fee to enter the lottery shall be one thousand dollars, the fee to receive a provisional license shall be twenty-five thousand dollars and the fee to receive a final license shall be seventy-five thousand dollars.
- Micro-cultivator fee to enter the lottery shall be two hundred fifty dollars, the fee to receive a provisional license shall be five hundred dollars and the fee to receive a final license shall be one thousand dollars.
- Product manufacturer fee to enter the lottery shall be seven hundred fifty dollars, the fee to receive a provisional license shall be five thousand dollars and the fee to receive a final license shall be twenty- five thousand dollars.
- Food and beverage manufacturer fee to enter the lottery shall be two hundred fifty dollars, the fee to receive a provisional license shall be one thousand dollars and the fee to receive a final license shall be five thousand dollars.
- Product packager fee to enter the lottery shall be five hundred dollars, the fee to receive a provisional license shall be five thousand dollars and the fee to receive a final license shall be twenty-five thousand dollars.
- Delivery service fee to enter the lottery shall be two hundred fifty dollars, the fee to receive a provisional license shall be one thousand dollars and the fee to receive a final license shall be five thousand dollars.
There’s also a fee for dispensary facilities to become hybrid retailers (two hundred fifty thousand dollars) and a license conversion fee for a producer to engage in the adult use cannabis market (seven hundred fifty thousand dollars).
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How to apply for a Connecticut Cannabis Establishment License?
There’s not much info regarding the application process for a Connecticut Cannabis Establishment License, however, the proposed legislation establishes the following:
- Applicants shall apply on a form and in a manner prescribed by the commissioner;
- The department shall post on its Internet web site the application period, which shall specify the first and last date that the department will accept applications for that license type. Only complete license applications received by the department during the application period shall be considered.
Further, prior to the first date that the department will accept applications for a license type, the department shall, within its discretion, determine the maximum number of applications that shall be considered for that license type and post such information on its Internet web site.
If, upon the close of the application period for a license type, the department receives more applications than the maximum number to be considered, a third-party lottery operator shall conduct a lottery to select applications for review by the department. The third-party lottery operator shall:
- Not be provided any application received after the close of the application period;
- Give equal weight to every complete application submitted during the application period;
- Conduct an independent lottery for each license type that results in each application being randomly ranked starting with one and continuing sequentially; and
- Provide the department with all applications to be considered, which shall consist of the applications ranked numerically one to the maximum number set forth in accordance with the legislation.
If the department determined that it would review ten applications for a license type, the lottery shall provide the department with the applications ranked one through ten. Any application not selected through this lottery process shall not be reviewed and will not be eligible for licensure.
The third-party lottery operator shall rank all applications numerically, including those that exceed the number to be considered. Nothing shall prevent the third-party lottery operator from providing the numerical rankings of all applications for each license type for which a lottery is performed or the department from obtaining the numerical rankings of all applications for each license type for which a lottery is performed by the third-party lottery operator.
Upon being notified by the third-party lottery operator of the applications chosen for review, the department shall review each application to confirm it is complete and to determine whether any application:
- Includes a backer with a disqualifying conviction;
- Includes a backer that would result in common ownership in violation of the cap set forth in this act; or
- Has a backer who individually or in connection with a cannabis business in another state or country has an administrative finding or judicial decision that may substantively compromise the integrity of the cannabis program, as determined by the department, or that precludes its participation in this state’s cannabis program.
If the number of applications submitted is equal to or less than the number posted on the department’s Internet web site, the department may immediately begin to review the applications in accordance with this subsection without use of a lottery process.
If an applicant or a single backer of an applicant is disqualified on the basis of any of the criteria set forth in the legislation, the entire application shall be denied and such denial shall be a final decision of the department. Notwithstanding this, backers of the applicant entity named in the lottery application submission may be removed prior to submission of a final Connecticut cannabis establishment license application.
However, no additional backers may be added to a cannabis establishment application between the time of lottery entry and when a final license is awarded to the cannabis establishment. If the applicant removes any backer then the applicant entity shall not be denied due to such backer’s prior involvement if such backer is removed within thirty days of notice by the department of disqualification of a backer. Not later than thirty days after service of notice upon the applicant of a denial, the applicant may take an appeal therefrom to the Superior Court.
For each application denied the department may, within its discretion, request that the lottery provide the next-ranked application. This process may continue until the department has identified for further consideration the number of applications set forth on its Internet web site. If the number of applications remaining is less than the number posted on the department’s Internet web site, the department may, within its discretion, reopen the application period or award fewer licenses.
All applicants selected in the lottery and not denied shall be provided a provisional license application, which shall be submitted in a form and manner prescribed by the commissioner.
Applicants shall have sixty days from the date they receive their provisional application to complete the application. The right to apply for a provisional license is non transferable.
Upon receiving a provisional application from an applicant, the department shall review the application for completeness and to confirm that all information provided regarding any business plans, backers or third-party vendors is acceptable and in compliance with this section and any regulations promulgated thereunder.
If a provisional application meets the standards set forth in the legislation, the applicant shall be provided a provisional license. A provisional license shall be non transferable. If the provisional application does not meet the standards set forth in the legislation or is not completed within sixty days, the applicant shall not receive a provisional license.
The decision of the department not to award a provisional license shall be final and may be appealed in accordance with the general statutes. Nothing shall prevent a provisional applicant from submitting an application for a future lottery.
A provisional license shall expire after twelve months and shall not be renewed.
A provisional licensee may apply for a final license of the license type for which they applied during the initial application period.
Final license applications shall be submitted on a form and in a manner approved by the commissioner and shall include, but not be limited to, the information set forth in this section, as well as evidence of the following:
- A contract with an approved seed-to-sale vendor in accordance with the provisions of this act;
- A right to occupy the location at which the establishment shall be located;
- Zoning approval for the cannabis establishment;
- Written policies for preventing diversion and misuse of cannabis and sales to underage persons; and
- All other security requirements set forth by the department based on the specific license type.
At any point prior to the expiration of the provisional license, the department may award a provisional licensee a final license for the license type for which the licensee applied. Prior to receiving final license approval, a provisional licensee shall not possess, distribute, manufacture, sell or transfer cannabis. In addition, the department may conduct a site inspection prior to issuing a final license.
At any time after receiving a final license, a cannabis establishment may begin operations, provided all other requirements for opening a business in compliance with the laws of this state are complete and all employees have been registered with the department.
Taxes for a Connecticut Cannabis Establishments License
The bill would levy a wholesale tax of $1.25 per dry weight gram of flower, $.50 per dry weight of cannabis trim, and $.28 per gram of wet weight cannabis, in addition to the state sales tax of 6.25%. Municipalities could also levy up to a 3% tax at the point of sale.
If you want more information regarding what could you do in order to enter the cannabis industry in Connecticut, don’t hesitate to contact us.
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