After almost 10 months of recreational marijuana sales in Connecticut, the number of dispensaries in the state has slowly climbed, with retail outlets heavily concentrated in or close to metropolitan areas, and along major highways, according to a Hartford Business Journal analysis.As of Oct. 25, there were 26 dispensaries in Connecticut, according to data from […]
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After almost 10 months of recreational marijuana sales in Connecticut, the number of dispensaries in the state has slowly climbed, with retail outlets heavily concentrated in or close to metropolitan areas, and along major highways, according to a Hartford Business Journal analysis.
As of Oct. 25, there were 26 dispensaries in Connecticut, according to data from the state Department of Consumer Protection (DCP). Six serve adult-use customers only, four serve medical marijuana patients, and 16 offer products to both markets.
The regional breakdown of dispensary locations helps paint a picture of what the industry could look like as it matures. In the first year of adult-use sales, new dispensaries have opened in densely populated areas and along heavily traveled corridors.
Hartford County has the most dispensaries (8), followed by five each in Fairfield and New Haven counties. Less populated Litchfield and Windham counties have only one dispensary each.
Hartford doesn’t have any dispensaries, but that’s expected to change in the months ahead, with several retail sites planned.
The 21 municipalities that currently host at least one dispensary have an average population of 51,662 residents, according to an HBJ analysis of U.S. Census data, ranging from a high of 138,915 residents in New Haven to a low 5,544 residents in Willington.
Bristol, Danbury, Manchester, Newington and Stamford are the only municipalities with multiple retail locations. They each have populations of 30,000 or greater.
“The dust is settling a little bit, and we’re definitely seeing a lot of these retail outlets pop up in the more condensed areas of the state — cities where there’s more population and potential customers,” said Drew Richards, a CPA at accounting and consulting firm Marcum.
Zoning challenges
Richards said a lot of dispensary locations are being dictated by local zoning rules.
The state’s adult-use marijuana law allows municipalities to restrict cannabis businesses from opening up shop while they draft zoning regulations. Towns can also outright ban dispensaries and other cannabis businesses within their borders.
Thirty-one municipalities currently have cannabis business moratoriums in place, while 19 communities — including Avon, Glastonbury and Southington — have gone a step further and banned such companies, according to DCP data.
“You have a bunch of these towns that said ‘nope, it’s prohibited in our town,’ so that limits your potential space for a business even more so,” Richards said. “You go from this fairly small state of Connecticut, knock that down by all these towns that aren’t allowing cannabis, so that shrinks the population of available real estate even more, and then you’re tied down by what zone you can be in.”
Moratoriums can signal the need to begin looking in different parts of the state for a dispensary location, said Ian Butler, an attorney with Glastonbury law firm Brown Paindiris & Scott LLP (BPS Lawyers).
Some towns that had medical marijuana dispensaries also had cannabis-related zoning regulations in place, which made it easier for them to accommodate adult-use or hybrid dispensaries, experts said.
“Part of that concentration in Hartford and New Haven counties is because a lot of those towns opted in to allowing cannabis,” said Michelle Bodian, an attorney with cannabis law firm Vicente LLP.
However, even municipalities that allow dispensaries have restrictions on where they can be located, like in industrial zones and away from certain areas like schools, further limiting the available real estate.
There is some incentive for cities and towns to allow cannabis retail establishments — they can share in the tax revenue. There are three taxes on retail cannabis sales in Connecticut, including a 3% sales tax dedicated to the city or town where the purchase occurs.
Adult-use cannabis sales exceeded $97 million through September, according to DCP, which has yielded more than $8.8 million in tax revenue.
Chicago-based multistate cannabis operator Verano Holdings Corp. in early October opened one of the state’s newest hybrid dispensaries, Zen Leaf Newington. The storefront, at the site of the former Bonefish Grill restaurant at 2903 Berlin Turnpike, is on the corner of a heavily trafficked commuter and business thoroughfare connecting Wethersfield, Newington and Berlin.
About 32,500 vehicles pass by the site daily, which makes it an appealing retail location, the company said.
“At Verano, we always aim to open our Zen Leaf dispensaries in convenient, accessible, and high-traffic locations in commercial corridors that have ample parking, a large sales floor and a welcoming visual aesthetic,” said company spokesman Steve Mazeika.
Mazeika added that it shouldn’t be a surprise “to see more retail locations open within densely populated areas that cater to a larger potential customer base,” as the recreational market “continues to grow and mature in Connecticut.”
Too close to Massachusetts?
Verano picked the south-of-Hartford suburb of Newington for its most recent storefront, and other companies have chosen nearby municipalities east and west of Hartford to open up their shops.
However, there’s been little new dispensary activity north of Hartford, said Marcum’s Richards. This could reflect some hesitancy among cannabis companies to open dispensaries too close to the Massachusetts border.
Connecticut customers have continued to cross state lines to the Bay State, where recreational cannabis prices are cheaper and dispensaries offer more product variety.
“How do we keep these people within our state and have them buy and consume within Connecticut from Connecticut companies? That’s a challenge as well,” Richards said.
Butler said he’s heard similar sentiments from his clients. Though there are a few cannabis retail locations in the works north of Hartford, many have targeted south of the capital.
“Location-wise, how close are you to the state line? Massachusetts was ahead of Connecticut in adopting adult-use. For a long time, I heard clients say that they were not really even considering anything north of Hartford,” Butler said.
