A Dozen Lawsuits Challenge Connecticut’s Adult-Use Cannabis Cultivation Licensing Process
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A Dozen Lawsuits Challenge Connecticut’s Adult-Use Cannabis Cultivation Licensing Process

Twelve companies have sued the state after being denied licenses.

August 17, 2022

A dozen lawsuits have now been filed to challenge Connecticut’s adult-use cannabis cultivation licensing process, according  to a CT Insider report.

The Hartford Cannabis Company, a social equity applicant that was ultimately denied a license, was the first to sue the state last month. That lawsuit alleges that the Social Equity Council, which was created by the Legislature through Connecticut’s adult-use cannabis law to oversee the rollout of the state’s adult-use market to ensure it benefits those most negatively impacted by the war on drugs, changed the rules while the application process was underway and refused to allow the company to amend its application.

Additional applicants have since filed their own lawsuits to challenge the licensing process, CT Insider reported, including Core Cult, Coastal Cannabis, Red Barn Farms, DF C3, Leaf CT, Let’s Grow Hartford, Elm City Agg, Green Meadows Farm, Gunter Investments and Nautilus Botanicals.

The Connecticut Department of Consumer Protection, which oversees the state’s adult-use cannabis market, and the Department of Economic and Community Development are named as defendants in the litigation, according to the news outlet.

When Connecticut legalized adult-use cannabis last year, half the licenses were earmarked for social equity applicants who must meet income, residency and ownership requirements, and social equity license holders must own and control at least 65% of the business.

Last month, the Social Equity Council approved 16 adult-use cannabis cultivation licenses from a pool of 41 applicants.

RELATED: Connecticut Names 16 Adult-Use Cannabis Cultivation Applicants Approved for Next Steps in Licensure

Then, on July 28, the council approved five adult-use dispensary licenses.

As Connecticut’s supply chain continues to fall into place, the market is expected to launch by the end of the year.

In response to the flurry of litigation, regulators are looking to transfer one of the lawsuits to an administrative court, according to a Law360 report.

State officials asked a judge Aug. 15 to transfer a challenge brought by Acreage Connecticut Cultivation JV LLC, a shared venture between multistate cannabis operator Acreage Holdings and Kebra Smith-Bolden.

Regulators claim the lawsuit, which was filed in Connecticut Superior Court Aug. 4, “was an appeal of an administrative decision and therefore belonged in the Tax and Administrative Appeals Session of the state judiciary,” Law360 reported.

Acreage and Smith-Bolden claim in the suit that state officials were incorrect in their assessment that Smith-Bolden did not qualify as a social equity applicant under Connecticut’s cannabis law, as Acreage Connecticut Cultivation JV LLC is 65% owned by Smith-Bolden, who the plaintiffs claim meets the income and residency requirements.

The lawsuit alleges that the Social Equity Council “used arbitrary and ‘unconstitutionally vague’ definitions regarding entity control to deny the company’s application,” Law360 reported.

The plaintiffs are ultimately seeking confirmation that they qualify as social equity applicants, as well as an injunction to block the state from awarding the licenses until the lawsuit is settled, according to Law360.