🔒Slow rollout of CT’s newest cannabis cultivation facility reflects industry’s growing pains

It’s no secret that Connecticut’s adult-use marijuana industry has had a bumpy rollout since its launch two years ago.

A recent tour of Fine Fettle’s new cannabis cultivation facility in Bloomfield revealed a few of the on-the-ground effects of that difficult start.

“We have three more of these rooms right now that have just been sitting like this since December,” said Erik Bjornson, Fine Fettle’s director of facility operations and production, looking around a fully equipped but empty growing room during a late-March visit.

“We thought we’d be fully open already,” said Kennard Ray, Fine Fettle’s CEO of social equity licenses.

This 46,000-square-foot, new-build facility represents a $30 million investment for the company, which also has separate operations in Massachusetts and Georgia.

It’s one of the first full-size cultivation facilities in Connecticut to be built under a social equity partnership, and sited in what the law deems to be a disproportionately impacted area — a part of the state where people were hard hit by the war on drugs.

“We’ve got decades combined of experience building out these facilities,” said Bjornson, who has been working in the cannabis industry for some 15 years and had experience in Michigan and Massachusetts before he came to Connecticut. “Working in this town, in this state, it has been confusing exactly what we need to change and be compliant with building codes.”

Time is money

Fine Fettle began building here in late 2022, and got the initial certificate of occupancy for some of the rooms within the facility late in 2024, after extensive inspections from the Department of Consumer Protection, which regulates the cannabis industry. But then it ran into difficulties, with the town of Bloomfield asking for more documentation about some of the growing equipment and lighting, and referring the business for yet another state inspection.

Among the parts of the facility that were put on hold were the central “mother room” where the growing stock is started, and three of the six “flower rooms” where plants are brought to maturity.

Both Bjornson and Ray said all the agencies at the town and state levels have been helpful, but overall it’s been a confusing process for both the officials and company.

And in the interim, time is money. One growing cycle takes eight to nine weeks, and the facility had to start off at half-capacity.

Fine Fettle is currently employing 13 people in Bloomfield. It hopes that by June it will grow to around 24 positions, and it has plans to continue hiring from there.

“By not having access to that mom room and those bed rooms, we’re really cutting into our potential for actual flower to be put out into the marketplace,” Bjornson said.

A recent shift by the Department of Consumer Protection has put oversight and enforcement of the marijuana industry under a new leader — DCP attorney Lila McKinley — and a newly formed division within the agency.

Ray says he welcomes that change because it will provide better linkages to make sure the process runs more smoothly in the future.

“Overall, they’ve been working hard to get stuff right for us,” he said.

Kaitlyn Krasselt, a spokesperson for DCP, acknowledged the state’s cannabis industry is complicated and has a lot of requirements. She said the creation of the new division will allow for more specialized focus on the industry.

“It may make things faster just because they are focused fully on cannabis, all the way up to the leadership of that division,” she said.

Complex rules

Attorney Sarah Westby, chair of law firm Shipman & Goodwin’s cannabis team, said the market has been “struggling on a lot of fronts.”

“There were far fewer cultivators who actually got up and running than were approved for licenses,” she said.

Of the 27 license approvals, only two companies have so far proceeded to final licenses, with a handful still in the process, she said. For many of the others, either they don’t have the funds to build out a costly facility, or they don’t see the benefit in terms of return on investment in Connecticut, Westby said.

“A lot of people thought the market would grow much more quickly than it did,” she said. “A lot of markets that transition from medical to adult use see a three or four times multiplier on the sales, and Connecticut has just not seen those kind of numbers.”

Locating businesses has also proved difficult, especially when individual towns have a lot of leeway to refuse zoning permission to cannabis companies.

“The lack of suitable real estate for cultivation in particular has been a real challenge,” Westby said. “I know businesses who have the financing, have the operational know-how, but just cannot find a place for their cultivation business.”

On the cultivation front, Pullman & Comley attorney Andrew Glassman said Connecticut essentially has the opposite problem of its northern neighbor Massachusetts, where growing operations built out so quickly that the state ended up with an oversupply and prices dropped significantly.

“After everything shakes out, you’re still going to be left with the need for more cultivation space in the state of Connecticut,” Glassman said.

There are currently six full-size cultivation facilities operating in the state, including four that were up and running before Connecticut legalized the recreational use of cannabis. Those grow facilities were originally established to serve the medical marijuana market, and then were allowed to expand production to serve the adult-use industry.

Glassman said while regulators are doing their best to shepherd a complex set of rules and an emerging industry, it can still be frustrating for licensees who need answers to specific questions.

“The DCP would be the first to tell you that they do have a need for more personnel given the many tasks they undertake, including the high demand for answers to questions asked by licensees and applicants,” he said. “This means that while the regulators try to respond as fast as they can to licensee and applicant questions, these businesses would like faster answers to their questions as they try to make critical business decisions.”

Because Connecticut’s adult-use market has so far remained small and has grown much more slowly than expected, Glassman says the large, multistate operators are becoming less interested in the state.

“They’re making the decision to take their existing capital or investment dollars elsewhere,” he said. “The capital is still there, if the capital partner can control the destiny of the business they’re investing in.”

‘Messy history’

That’s making life complicated for those social equity license holders who are looking for partnerships with well-capitalized and experienced businesses to bring their vision to life.

Fine Fettle’s Ray is one of those who believes not enough attention is being paid to the experience of social equity entrepreneurs like him who were early into the market and may now have valuable feedback for lawmakers.

“Now that the industry is a real thing in Connecticut, I think we need to review some of those things that are on the books in earnest and maybe slow down on introducing new concepts,” he said.

For instance, he says the current push in the legislature to license hemp growers to produce cannabis outside of disproportionately impacted areas doesn’t sit well with him as a way to expand the industry, after his company has spent millions of dollars on a new facility under the old rules.

On the other hand, he’s fully behind another change under consideration. The initial law built in protections for social equity entrepreneurs, one of which prohibited other businesses from buying out their licenses for seven years.

A bill in the legislature would reduce that to three years.

Ray says that change would resolve a tricky aspect of a partnership enterprise such as his with Fine Fettle.

“If we decided to sell today, my partners can sell, but I have to go along with the building,” he said. “So, I get sold too. America has a messy history with that.”