Connecticut Adult-Use Market Update - January 2022

https://www.sapphirerisk.com/opportunities-in-the-connecticut-cannabis-market/

On 4 January 2022, the Connecticut Department of Consumer Protection (DCP) announced they will start accepting 9 different types of adult-use cannabis business license applications soon with the first types starting at the beginning of next month. Applications will be available at ct.gov/cannabis. 

The DCP announced the licenses will be awarded through two lotteries: a general lottery and a social equity lottery.  There will be a 90-day application period after the start date to submit completed applications for all applicants. Below is a list of the application types, the number of licenses awarded, and the dates for when new potential businesses can start applying.

• Cultivators: in disproportionately impacted areas *non-lottery
•  Submittal Start Date: 3 February 2022
• Micro-cultivator: 2 general licenses, 2 Social Equity licenses
• Submittal Start Date: 10 February 2022
• Retailers: 6 general licenses, 6 Social Equity licenses
• Submittal Start Date: 3 February 2022
• Delivery services: 5 general licenses, 5 Social Equity licenses 
• Submittal Start Date: 17 February 2022
• Hybrid retailer: 2 general licenses, 2 Social Equity licenses  (permitted to sell to medical marijuana patients as well).
• Submittal Start Date: 24 February 2022 
• Food and beverage manufacturers: 5 general licenses, 5 Social Equity licenses (incorporates THC into food and beverages).
• Submittal Start Date: 3 March 2022
• Product manufacturer: 3 general licenses, 3 Social Equity licenses 
• Submittal Start Date: 10 March 2022
• Packager: 3 general licenses, 3 Social Equity licenses
•  Submittal Start Date: 17 March 2022
• Transporter: 2 general licenses, 2 Social Equity licenses 
• Submittal Start Date: 24 March 2022

For the social equity lottery:

• Applicants who apply for the lottery must pay the lottery fee and put on their lottery application that they are applying as a Social Equity Applicant.
• Those who are applying as Social Equity applicants will be assigned a number and entered into the social equity lottery.
• An outside lottery operator will run the lottery for the social equity applicants. 
• There is no advantage for applicants who submit their lottery applications first. Applicants should prioritize submitting the best application they can.
• Once the social equity lottery has been run, DCP will share the lottery winners with the Social Equity Council. The Social Equity Council will look at the information submitted and decide if the applicants picked in the lottery qualify
• If the applicant qualifies as a social equity applicant, a background check will be run.
• If the applicant does NOT qualify as a social equity applicant, the applicant can pay the difference for the full lottery fee and have their application entered into the general lottery. 

“We know people are anxious to apply and see this market open, and we are hopeful that making this information available will help applicants as they begin to prepare for the lottery process,” said DCP Commissioner Michelle Seagull, in a released statement. 

For the General lottery:

• Once all of the social equity applicants have been chosen, a general lottery will be run. The general lottery will include:
• Applicants who are not social equity applicants and have paid the full lottery fee.
• Applicants who were picked in the social equity lottery, but
• Did not qualify as a social lottery applicant, and paid the difference for the full lottery fee.
• Social equity applicants who were not picked in the social equity lottery.
• The general lottery will be run by an outside operator. Lottery applicants will be picked until the Department has filled all of the available licenses for each license type.
• There is no advantage for applicants who submit their lottery applications first. Applicants should prioritize submitting the best application they can.

Final license application requirements:

3C can help you prepare and strategically guide you through Connecticut’s submittal process, which is not as simple as buying a lottery ticket. There is ample work needed to prepare, and due diligence is required ahead of time as a Final license application requires the following:

• A contract with an approved seed-to-sale vendor in accordance with the bill’s provisions.
• A right to occupy the location where the cannabis establishment will be located.
• Any necessary local zoning approval for the cannabis establishment.
• A social equity plan.
• A workforce development plan.
• Written policies for preventing diversion and misuse of cannabis and sales to underage persons.
• All other security requirements are set forth by the department based on the specific license type.
• A labor peace agreement entered into between the cannabis establishment and a bona fide labor organization.
• A certification that they are using a project labor agreement for construction projects of $5 million or more.