🔒Wide-ranging cannabis bill would revise taxes, local rules and product regulations

A cannabis bill currently before the General Assembly would make dozens of tweaks to laws governing cannabis, hemp and infused products, touching everything from local regulation of public consumption to the tax treatment of cannabis businesses. House Bill 5350, raised by the legislature’s General Law Committee, spans more than 170 pages and updates numerous sections of state statute as Connecticut continues to refine its legal cannabis framework several years after launching adult-use sales. The proposal addresses taxes, municipal authority, driver safety rules, product definitions and other regulatory details affecting both the cannabis industry and consumers. Tax change for cannabis businesses One of the most significant provisions for operators would change how cannabis companies are taxed at the state level. Because cannabis remains illegal under federal law, businesses are subject to Section 280E of the Internal Revenue Code, which prevents them from deducting most ordinary business expenses. The bill would allow licensed cannabis businesses in Connecticut to deduct those ordinary and necessary expenses when calculating their state income tax liability, even though federal law still disallows the deductions. That change could lower the effective state tax burden on cannabis operators. Municipal regulation of public consumption The legislation also clarifies how municipalities may regulate cannabis use in public spaces. Cities and towns would be allowed to restrict or regulate cannabis consumption on property they control, such as parks and public facilities. However, municipalities with populations greater than 50,000 would be required to designate at least one location where public cannabis consumption is permitted if they adopt broader restrictions. Municipal rules could also limit cannabis smoking or vaping in outdoor restaurant areas and impose fines for violations. Driver education and impaired-driving provisions The proposal also incorporates cannabis impairment into motor-vehicle statutes and driver education requirements. Driver training programs would include instruction on the physiological and safety effects of cannabis consumption, including its impact on reaction time, perception and motor skills. In impaired-driving prosecutions, courts could take judicial notice that cannabis consumption can impair a person’s ability to operate a vehicle or vessel and affect cognitive functions such as decision-making, attention and judgment. Statutory updates across the board Much of the bill consists of updates to existing statutes to reflect Connecticut’s legalized cannabis market. For example, the legislation replaces older references to “marijuana” with the broader statutory definition of “cannabis” across numerous sections of law, including tax statutes, public health provisions and regulatory statutes. The bill also cancels certain legacy tax liabilities related to the sale or possession of cannabis under earlier state laws prior to legalization. Agriculture and zoning clarification Another provision clarifies that cannabis cultivation is not included in the statutory definition of agriculture for certain purposes under state law. That distinction can affect how cannabis operations are treated under zoning rules and other statutes governing farming activities. Part of broader regulatory updates The bill is one of several cannabis-related measures introduced during the current legislative session as lawmakers continue to adjust the regulatory framework created by Connecticut’s 2021 legalization law. A separate bill, House Bill 5351, focuses primarily on changes to the state’s Social Equity Council and oversight of programs intended to help communities disproportionately harmed by past cannabis enforcement participate in the legalized industry. Both bills will be reviewed by the General Law Committee during a Monday meeting. ChatGPT was used to help produce this story.