A third cannabis company, operated by a well-known figurehead in Connecticut’s existing hemp and CBD market, is appealing the state’s decision to deny its social equity status for a grower license.
Nautilus Botanicals, a Bridgeport-based cannabis growing operation founded by Luis Vega, appealed the SEC’s July denial of its status as an affected area cultivation license disproportionately (DIA). Vega is a well-known hemp farmer who has been operating North Haven-based Wepa! Farms since 2016. Their application was among 25 that were denied to qualify for social equity status after the SEC approved 16 other DIA applications.
The company has an address of 141 North Avenue, Bridgeport.
Nautilus’ appeal, which was filed Aug. 3 by counsel at Shipman & Goodwin LLP in Hartford, argues that the SEC was incorrect in its determination that the business did not meet “the control requirements to exercise operational authority over the day-to-day affairs of the business and to have voting power to direct management, officers and policies.”
“The SEC misread its application documents and failed to consider the entirety of the documentation demonstrating ownership and control, thereby erroneously denying Nautilus SEA status and causing it to lose a substantial amount of money, time, business opportunities, investments and competitive advantages.” of the resource is called “Specifically, the SEC misinterpreted the Nautilus operating agreement and erroneously failed to take into account SEA’s role as CEO and his holding of 65% of the ownership and voting interests in Nautilus.
DIA applicants could submit applications during a single, non-lottery 90-day window, like other types of licenses. Last year’s cannabis law defines a disproportionately affected area as a US census tract in Connecticut that has a historically higher conviction rate for drug-related crimes or an unemployment rate greater than 10 percent.
Nautilus says nowhere in the SEC’s checklist of required documents released in February is there language requesting evidence of an equity applicant’s control of at least 65% of day-to-day affairs and the breakdown of ownership of the proposed company.
Regardless, the appeal states that Vega meets the statutory criteria for an equity applicant and “holds 65% of Nautilus’ interests, which are referred to as ‘Membership Interests’ in the operating Nautilus. Three investors hold the remaining 35% membership interest.”
At a news conference in March, Vega said Nautilus Botanicals could create about 150 jobs in the Bridgeport area if licensed.
Like the two appeals presented before him, Vega’s appeal names as defendants the Council of Social Equity, the Department of Economic and Community Development of the State and the Department of Consumer Protection.