As of Friday morning, there were 13 pending legal cases against the council on behalf of denied cannabis license applicants. One of the lawsuits, filed on behalf of a company whose application for a retail license was rejected, sought to prevent the council from approving further retail applications from applicants for capital until the appeal was resolved.
The state Department of Consumer Protection, which oversees regulation of Connecticut’s adult-use market, and the state Department of Community and Economic Development are also named as defendants in the lawsuits. The Attorney General’s Office, which represents the department and the council, declined to comment, citing pending litigation.
All rejected applicants intend to appeal the council’s determination not to qualify as social equity applicants, including failure to meet the property and residency requirements.
The appeals represent the latest wrinkle in Connecticut’s rollout of the new legal marketplace, which aims to create economic opportunity for the goals of earlier cannabis prohibition and enforcement.
The complaints, which largely target the state’s grow licensing process, raise issues with the board’s process for evaluating equity applicants, including not being given an opportunity to explain discrepancies or questions arising from the applications.
Shangri-La CT Inc., which is among 12 grower applications that received preliminary approval from the board and is awaiting further review by DCP, is the only plaintiff until now that it has challenged the state’s retail licensing process.
The company filed a motion to stay, saying the board wrongly rejected its bid for a retail license because the application referred to a “different business name” and was therefore “insufficient to verify the ownership and control requirement.”
A lawyer representing Shangri La and one of its backers, Kepal Patel, declined to comment this week on the appeal and the stay motion.
“If this process is not stopped immediately, the plaintiff will suffer irreparable harm because he will permanently lose the opportunity to obtain one of a limited number of retail licenses granted to social equity applicants in this lottery round,” Shangri La’s lawyers said in court. archiving “There is no certainty that the plaintiff will ever be selected in future lottery rounds. This is a non-monetary loss.”
Most cannabis license applicants must go through a lottery process with some types of licenses attracting far more interest than others. For example, the state received 8,360 applications for the six retail licenses available to equity applicants to begin with compared to the 12 applications it received for the produce packager for the three capital licenses available.
Shangri-La, in its stay motion, argued the court should require the social equity board to “take no further action” on the retail license applications until the appeal is resolved .
On Friday, the council approved 12 cannabis license applications, including one for retail sales, bringing the total to six with five applications given the green light by the council at a previous meeting.
It’s unclear whether the complaints will delay Connecticut’s launch of its new adult-use market, with retail sales expected to begin later this year. In Illinois, a judge issued an injunction barring the issuance of new licenses for recreational dispensaries, after a series of lawsuits were filed challenging the state’s process for licensing cannabis establishments . The stay was lifted nearly 10 months later, paving the way for the state to issue 185 licenses for new marijuana dispensaries.