Connecticut Senate Passes Adult-Use Marijuana Bill – Cannabis & Hemp – United States – Mondaq News Alerts

United States: Connecticut Senate Passes Adult-Use Marijuana Bill

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Early this morning the Senate approved a bill decriminalizing
recreational marijuana for adults age 21 and over and creating the
framework for a legal cannabis market in Connecticut. The bill now
goes to a closely divided House of Representatives with less than
two days before the clock runs out on the current legislative
session.

Legislators introduced the final bill late on Saturday, after
reaching a deal with the Governor.  The final 297-page bill
incorporates elements of the Governor’s bill (SB 888) and the
labor committee bill (HB 6377).  It contains compromises on
homegrown marijuana and license priority. If passed by the House
and signed into law by the Governor, the law would:

  • Legalize possession of up to 1.5 ounces of marijuana, and allow
    another 5 ounces to be kept legally in the home or a locked
    vehicle, beginning January 1, 2022.
  • Permit homegrown marijuana for holders of medical marijuana
    cards on October 1, 2022 and to others in July 2023.
  • Automatically expunge certain marijuana convictions and provide
    a pathway to expunge others.
  • Prohibit employers from taking adverse actions against
    employees merely for testing positive for cannabis metabolites,
    absent controlling federal restrictions.
  • Prohibit educational institutions from penalizing students
    merely for testing positive for cannabis metabolites, absent
    controlling federal restrictions.
  • Allow municipalities to prohibit marijuana businesses or ban
    marijuana delivery within their jurisdictions.

The law also controls licensing of marijuana growers, retailers,
and delivery services.  Here are some of the key requirements
for licenses:

  • Half of the initial licenses will be reserved for social equity
    applicants* who will receive priority in license processing
    and approval.
  • A 15-person Social Equity Council will set rules for social
    equity applicants and review their applications.
  • The state will create two lotteries for licenses, the first
    only for social equity applicants and the second for all other
    applicants.
  • Applicants must pay a fee to enter the lottery, ranging from
    $250 to $1,000, depending on the size and type of business.
  • Licenses will range in cost from $5,000 to $3 million,
    depending on the size and type of business, with a 50% discount for
    social equity applicants and social equity joint ventures.
  • Existing medical marijuana dispensaries who seek to convert
    into hybrid retailers (i.e., those selling both medical and
    recreational marijuana) must pay a licensing fee of $1
    million.
  • Applications from dispensary facilities that wish to convert to
    hybrid retailers will be accepted on or after July 1, 2021.
  • All other applications will be accepted no later than 30 days
    from the date in which the Social Equity Council posts application
    criteria on its website, which must occur by September 1,
    2021.

While the bill makes significant strides towards ensuring equity
in the would-be legal cannabis market, existing businesses with
market experience and capital will still have the upper hand. 
In addition, the provision allowing municipalities to ban cannabis
businesses may lead to a patchwork of conflicting local
regulations, leaving businesses to operate in legal quicksand.

The bill imposes a myriad of requirements on licensing,
taxation, and business operations. Stay tuned for an in-depth
analysis of those requirements if the bill becomes law.

_____
*A “social equity applicant” means an applicant who
is at least 65% owned and controlled by an individual or
individuals who:

  1.   Had an average household income of less
    than 300% of the state median household income over the last three
    tax years; and
  2.   (i) Was a resident of a disproportionately
    impacted area for at least five of the ten years immediately
    preceding the date of such application; or (ii)
    Was a resident of a disproportionately impacted area for not less
    than nine years prior to attaining the age of eighteen.

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