The Social Equity Council Tuesday morning approved social equity status for 16 cannabis cultivation applicants hoping to grow marijuana in their respective cities.
After 41 social equity applicants submitted paperwork for disproportionately impacted area cultivation licenses, 16 businesses had their social equity status approved by the SEC and 25 were recommended for denial based on not meeting the income and residency threshold or ownership and control requirements.
However, some Social Equity Council members objected to the denials and would like more information about how the process played out.
Last year’s cannabis law defines a disproportionately impacted area as a U.S. census tract in Connecticut that has a higher historical conviction rate for drug-related offenses, or an unemployment rate greater than 10%.
Applicants weren’t required to disclose where they intended to open their cultivator facilities, but they did submit their current residency. Of the 16 approved applicants: two live in Bridgeport; five in Hartford; one in Manchester; one in Middletown; three in New Britain; one in Southington; one in Stamford; and two in Waterbury.
The Department of Consumer Protection will now conduct background checks before awarding applicants 14-month provisional licenses for their businesses.
Social Equity Council Chair Andrea Comer called the vote “transformative” for applicants and the social equity process in Connecticut as it relates to legal cannabis and “will bring change to communities most harmed by the war on drugs through employment and community reinvestment.”
When it came to the 25 applications recommended for denial, though, some members of the council wanted more clarity. CohnReznick, the third-party firm picked to analyze applications before recommending approvals and denials to the council, disqualified 17 companies based on ownership and control standards and another eight based on residency and income issues.
SEC member Subira Gordon asked that the council separate the eight applications that solely failed the ownership and control review because the state’s legalization law has lots of “gray area” and ambiguity when it comes to the 65% ownership stipulation. She was concerned that these applicants were recommended for denial based on simply incorrectly filling out their intentions to pursue a joint venture with other financial backers.
“It doesn’t sit right with me, I’m going to be 100% honest,” Gordon said. “We heard that there was no interview process, applicants weren’t given the opportunity to come back and say ‘that’s not exactly what I meant,’ it’s all based on what was written on paper.”
Gordon and SEC member Corrie Betts both voted against those eight denials, but ultimately they were overruled.
Applications that were denied can appeal the decision to the state Superior Court.
Per section 149 of last year’s cannabis legalization law, DIA cultivator provisional licenses are granted only after the SEC verifies that the applicant: meets the criteria as a social equity applicant; submitted and passed a criminal background check by the DCP; and then pays $3 million that will be deposited in the Social Equity and Innovation Fund.
This pool of money will go to social equity applicants for access to capital, technical assistance for the startup and operation of a business, and funding for workforce education and community investments.
Connecticut Cannabis Chamber of Commerce President Adam Wood praised this week’s vote, but said the group looks forward to learning more about applications that were denied based on ownership and control requirements. He said the chamber seeks more clarification on “some of the ambiguities” in the state’s cannabis law.
“This decision will generate $48 million in income to advance the social equity program in Connecticut and create hundreds of good-paying jobs in our state,” Wood said. “The vote will also bring needed economic development, opportunity, and tax-base growth in some of our state’s most disproportionately impacted communities in cities such as Bridgeport, Hartford, and New Haven.”
