{"id":4323,"date":"2022-02-03T08:00:00","date_gmt":"2022-02-03T08:00:00","guid":{"rendered":"http:\/\/CAIiECy7IXixsnlXQ_YMFbX_7DcqGQgEKhAIACoHCAow3cCjCzCgy7sDMKy5hAc"},"modified":"2022-02-03T08:00:00","modified_gmt":"2022-02-03T08:00:00","slug":"connecticuts-3-million-fee-for-social-equity-cannabis-grower-permits-raises-obstacles-and-eyebrows-marijuana-business-daily","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=4323","title":{"rendered":"Connecticut’s $3 million fee for social equity cannabis grower permits raises obstacles – and eyebrows – Marijuana Business Daily"},"content":{"rendered":"
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Connecticut opened the window Thursday to social equity applicants seeking to build and operate cannabis cultivation facilities totaling up to 250,000 square feet as part of the state\u2019s upcoming adult-use market.<\/p>\n

But there\u2019s a \u201chuge catch\u201d \u2013 the licensing fee is $3 million, noted Michelle Bodian, a senior associate attorney in Vicente Sederberg\u2019s Boston and New York offices and the lead on Connecticut licensing.<\/p>\n

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\u201cIt\u2019s a head-scratcher,\u201d she said \u2013 and a huge barrier to entry.<\/p>\n

The $3 million fee sticks out in a social equity program that otherwise is considered by some to be one of the best in the country in terms of promoting greater participation among minority entrepreneurs and individuals affected by the war on drugs.<\/p>\n

It also is believed to be by far the highest fee social equity applicants face in the U.S. marijuana industry.<\/p>\n

The required payment, Bodian said, is baked into the recreational marijuana bill<\/a> passed by lawmakers last year and signed into law.<\/p>\n

So there\u2019s nothing the state\u2019s Social Equity Council can do about it.<\/p>\n

\u201cThey similarly have been scratching their head at every public meeting,\u201d Bodian said.<\/p>\n

Connecticut\u2019s adult-use market is expected to launch later this year.<\/p>\n

The MJBizFactbook projects<\/a> that sales could total as much as $250 million in the first full year and up to $750 million by the fourth year.<\/p>\n

Amber Littlejohn<\/a>, executive director of the national group Minority Cannabis Business Association, called the fee prohibitive for equity applicants.<\/p>\n

But it\u2019s just one part of the problem, Littlejohn said.<\/p>\n

\u201cExisting operators will get early access to the market and unlimited access to the market,\u201d she said.<\/p>\n

\u201cIt\u2019s yet another example of policies supporting and creating oligopolies.\u201d<\/p>\n

Littlejohn\u2019s statement is in reference to the fact that existing medical cannabis cultivators in Connecticut also can apply now for adult-use licenses, and they essentially have a head start because they already have facilities.<\/p>\n

Existing MMJ growers also are required to pay a $3 million fee, but that charge is reduced to $1.5 million if they take on a social equity partner.<\/p>\n

Connecticut\u2019s recreational marijuana law enacted last year also includes a provision that each licensed producer might be required to maintain a bank escrow account of $2 million.<\/p>\n

Kaitlyn Krasselt, communications director for the Connecticut Department of Consumer Protection, told MJBizDaily<\/em> that the question of the $3 million licensing fee should be directed to policymakers such as the lawmakers who sponsored the bill.<\/p>\n

Connecticut, along with New York<\/a>, initially had been regarded by some experts as setting a new bar for social equity. Connecticut\u2019s equity provisions include:<\/p>\n