Federal law restricts most banks from providing loans and other financing for marijuana businesses. A Connecticut social equity council wants the state to charter new banks to back the state’s cannabis industry.
Members of the state’s Social Equity Council are responsible for making sure the sale of recreational marijuana in Connecticut provides business opportunities for low-income and communities of color that are disproportionately impacted by drug policing.
“They need to source capital,” said council member Joseph Williams. “One of the biggest things around social equity that has eluded us is the lack of capital and I find we really need to address that as quickly as possible.”
Williams, who is with the Connecticut Small Business Development Center at UConn, is also concerned the state’s cannabis market will be oversaturated with marijuana producers and vendors. He wants the state to control the number of licenses it grants.
The council plans give anyone with a previous marijuana arrest or conviction to receive priority for a license to sell regardless of their wealth as long as they came from certain neighborhoods affected by the war on drugs, including residents in 35 Connecticut cities and towns.
Legal pot sales are expected in late 2022. The state could make as much as $40 million a year from pot sales. Under state law, sales tax revenue generated from marijuana sales could be reinvested by the council.
Melissa McCaw, secretary of the state Office of Policy and Management, said that could be used to fund the bond market.
Financing will likely be needed to address $1,000 licensing fees and $500 for social-equity applicants.