Connecticut’s Social Equity Council members did not admit error, but they are allowing five adult-use cannabis license applicants they previously rejected to resubmit their social equity applications.
That decision, which council members approved during their Sept. 26 meeting, stems from the council’s July approval of 16 adult-use cultivation licenses from a pool of 41 applicants for satisfactorily meeting the requirements set forth by state law to qualify for the Disproportionately Impacted Area (DIA) cultivator license type.
During what was supposed to be a one-time application period, social equity applicants were required to show control of at least 65% of the qualifying business as well as meet the law’s income and residency requirements.
But one of the 25 rejected applicants filed a lawsuit on the grounds that the Social Equity Council changed the rules midway through the process and did not allow for amended applications, claiming that there was no discussion about requiring the 65% ownership status at a previous meeting held by the council. More companies followed with litigation and a dozen lawsuits had been filed by mid-August.
Eleven of those lawsuits challenging the state’s social equity licensing process were later consolidated as one in New Britain Superior Court.
Now, the Social Equity Council is offering a do-over for a handful of companies that did not originally meet certain requirements during the three-month applications period earlier this year, CT News Junkie reported. Those companies are Brownstone Sales LLC, Leaf CT LLC, Let’s Grow Hartford LLC, Shangri-La CT Inc. and White Oak Apothecary LLC.
“Without admitting that the council erred in denying the license or otherwise failed to follow appropriate procedures, I believe it would be in the best interest of the council to reconsider these applications,” member Ojala Naeem said during the Sept. 26 council meeting.
Shangri-La also was one of six retailers selected earlier this month in a general lottery to proceed in the next steps of that licensing process.
At the Sept. 26 meeting, council members outlined new language for the 65% ownership and controlled status by an individual(s) applying for the social equity licenses, including that he, she or they “exercises operational authority over daily affairs of the business, has the voting power to direct the management, agents, and policies, and receives the beneficial interests of the business.”
Other social equity application ownership and control criteria more distinctly laid out prior to the original process include:
- Had an average household income of less than 300% of the state median household income (SMHI) over the three tax years immediately preceding the application (SMHI in 2021 is approximately $74,000); and
- Was a resident of a disproportionately impacted area for not less than five of the 10 years immediately preceding the date of such application.
Separately, the council members voted Sept. 26 to approve the social equity status for one product packager application, which will be sent to the Department of Consumer Protection (DCP) for further processing before possible inclusion in a licensing lottery. In addition, council members approved four equity joint venture applicants (not subject to the lottery process).
“I am excited we have approved the social equity applicants in the product packager license category,” Ginne-Rae Clay, the council’s executive director, said in a press release. “These approvals bring us closer to the opening of the cannabis market.”
Connecticut approved cannabis for adult use on July 1, 2021. Adult-use cannabis retail sales are anticipated to begin in the state by the end of 2022, according to the DCP.