The state Thursday morning approved social equity status for five cannabis retailers while denying all 14 proposed equity joint ventures because they failed to meet certain qualifying guidelines.
The Social Equity Council, meeting in full for the second time this month, accepted recommendations from accounting firm CohnReznick to approve social equity status for five adult-use retail applications. One application was denied.Â
Since six social equity retailer licenses will be allocated in this first lottery round, Social Equity Council Chair Andrea Comer said the Department of Consumer Protection will now ask CohnReznick to review the seventh application in the lottery list and determine their social equity status eligibility.
The names of the companies approved for social equity status weren’t immediately available, and won’t be until the DCP receives all approved applications. The DCP will grant provisional licenses to those applicants when and if they receive final approval.
Those who didn’t meet social equity criteria will have the option of entering into the general lottery. The one application denied had documentation that didn’t align with business names and ownership formation paperwork, a representative from CohnReznick said.
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The group also rejected that status for all 14 equity joint venture applications the state received, per recommendations from CohnReznick, because applicants failed to meet either income standards or ownership and control guidelines.
An equity joint venture is a business that is at least 50% owned and controlled by an individual or individuals that meet social equity criteria. Such entities can be created by existing medical marijuana producers and dispensaries.
Since equity joint ventures aren’t subject to a lottery time limit, applicants can just resubmit their paperwork with fixes and try again for approval.
Officials from the state Department of Consumer Protection said the plan is to have another lottery round in the second half of the year.
Earlier this month, the SEC approved social equity status for 16 disproportionately impacted area cultivators in the state. The DCP is now conducting background checks on those applicants before granting provisional licenses.
