🔒First-ever Social Equity Council chair Comer wants level playing field in cannabis industry

Andrea Comer has a lot of work ahead of her.

Comer chairs the 15-member Social Equity Council (SEC), a key regulator of Connecticut’s forthcoming recreational cannabis industry.

When state legislators were debating the cannabis legalization bill that Gov. Ned Lamont signed into law in June, a primary concern among some was social equity.

Pro-legalization advocates and some lawmakers highlighted the moral imperative of ensuring the pot industry would benefit marginalized communities that disproportionately bore the brunt of the nation’s half-century “war on drugs.”

That’s why the law that went into effect July 1, puts the SEC front and center in licensing prospective cannabis businesses — both those that qualify as social equity applicants as well as general applicants.

So far, the council has identified parts of the state that have been disproportionately affected by the war on drugs — a key criteria for determining whether a cannabis business applicant is eligible for social equity status, which provides advantages like reduced fees and preferential spots in license lottery drawings.

In the months ahead, SEC members must create equity measure standards, after which the Department of Consumer Protection (DCP) will start accepting cannabis business license applications, decide how many licenses the state will allow for each of the nine license categories and oversee a lottery process that decides which applicants it will consider.

Council members will rule on whether social equity applicants qualify for that status. General applicants also need the council to greenlight their social equity and workforce development plans.

In an interview with HBJ, Comer, who is also the deputy DCP commissioner, said the SEC’s goal is to make sure everybody, especially marginalized people, get fair access to Connecticut’s adult-use cannabis market.

She will be working closely with the SEC’s newly-named interim Executive Director Ginne-Rae Clay.

Here’s what else Comer had to say:

Q: What is the Social Equity Council’s top goal, and how will you judge whether it’s successful?

The recreational cannabis legislation is a multipronged act. The SEC, specifically, is [focused on] making sure the playing field — to the extent that it’s possible — is level for folks who come from disproportionately-affected communities; particularly when it comes to the “war on drugs,” which has severely impacted those communities beyond just incarceration.

That’s our overarching goal. We have tasks associated with that, including issuing a [request for proposals] for a social equity study so that we can look at the historic and current consequences of cannabis prohibition and criminalization, looking at the intentional and unintentional racial discrimination and disparity in the development of these policies, and then the long-term social, economic and family consequences of our failure to remedy that discrimination.

We also have to inform the industry’s workforce development plan.

Q: The legalization statute leaves it to the SEC to establish a lot of specific equity-related regulations. What are your priorities in this area?

I don’t want to speak for the entire council, but I can tell you one of the things I am most focused on is the access to capital for those folks who are looking to get into the market.

There’s lots of documentation including from the Small Business Administration, which says the share of minority businesses, while they’ve increased overtime, they tend to be smaller, less profitable and have lower survival rates.

And small business owners, particularly those owned by Blacks, Hispanics or Latinos, are disproportionately denied credit when they apply for it — even if their credit scores and personal wealth and revenue may be the same [as non-minorities].

So, I really hope that through this process we are able to identify a pathway to access to capital that has previously been somewhat elusive.

Q: Could you talk about some of the things you think the SEC should be directing funds toward? Does this include seed funding for some social equity businesses?

Yes, absolutely. I think there are opportunities, like what Massachusetts did, where they have incubator programs, or mentoring opportunities.

There are a few different ways we can support those who are coming into this, maybe without the existing capital. So, I would love to see some of the funding go toward that.

Q: Do you think municipalities and zoning regulations will become obstacles to social equity entrepreneurs?

I think they certainly have the potential to do that. If you think about the disproportionately-affected areas, by and large, they are very dense areas, and so rules not allowing cannabis businesses within 500 feet of a school pretty much affects everybody everywhere.

I’m hoping that our municipal leaders will really think about, and perhaps re-imagine what zoning might look like, so it is not a barrier to access for the communities that we are trying to serve.

Q: One concern that’s been articulated since the legalization bill was being drafted is that large multistate corporations may swamp out smaller entrepreneurs in the marketplace. Do you think it’s within the SEC’s purview to monitor that?

One of the charges the SEC has is to make some policy recommendations to the legislature for the next session.

As we look at more of the information that we are seeking — both through the social equity study and other information that comes our way — we will form recommendations.

The law now says that from now until June of 2025, cannabis licenses can’t be awarded to a lottery applicant who has two or more licenses. Hopefully that will start to mitigate some of the bigger players [from becoming too powerful].

I was just reading an article about Illinois — there was a study that found their recreational cannabis industry is dominated by six companies.

That’s certainly not the intent of the legislation in Connecticut and would not be something that we would want to happen.

Q: The SEC has to approve social equity and workforce development plans for non-equity applicants. What should these plans include?

I presume that we would want, among other things for the workforce development plan, for them to give hiring preference to residents of disproportionately-affected areas.

And certainly, I would like to see some metrics [from existing medical marijuana industry companies] that show the number of employees that were hired, retained and promoted that come from those areas.

In terms of social equity plans, it’s about: What is your approach for equity? Does it include funding a low-interest loan, creating an accelerator or incubator program?

Those are the types of things we would like to see, just some real thought, some real actionable and measurable steps to ensure that the intent of the social equity aspects of the legislation are honored.