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Gov. Lamont’s Recreational Marijuana Bill: How Does it Protect CT Small Businesses and Entrepreneurs?

July 8, 2020 General

Governor Lamont’s recently proposed bill seeks to legalize recreational sale and use of cannabis by adults, among other things. The 108-page bill was referred to the CT legislature’s judiciary committee on February 6, 2020. As it currently stands, the recreational cannabis legalization provisions in the bill become effective July 1, 2022. The delay is intended, in part, to allow time for a soon to be formed “Cannabis Equity Commission” to make recommendations to the state legislature and the Department of Consumer Protection regarding the bill and regulations that must follow.

A number of news outlets have provided summaries of the key components of the bill, including the Hartford Courant and the Journal Inquirer. The focus of this article is how the bill can better serve CT residents and small business owners.

The bill is very friendly toward “big cannabis” businesses in that it provides little to no protections against monopolization by out of state backers and investors. The bill also gives a tremendous head start to the four existing medical marijuana producers who already have a legal monopoly.

The governor’s recreational cannabis legalization bill makes faint-hearted attempts at preventing monopolization by “big cannabis” and windfall in favor of existing CT medical marijuana businesses, but it lacks teeth to effectively support local CT cannabis industry entrepreneur and to give them a fighting chance. A few honorable mentions of these “hollow protections” found within the bill include:

(1) the Cannabis Equity Commission will make a recommendation to the legislature, so that a legislature may consider whether to allow home growing of cannabis for personal use (Sec. 36);

(2) before issuing licenses to backers of cannabis businesses, the Dept. of Consumer Protection will take into consideration whether the backer has an ownership interest in any other cannabis establishment (Sec. 23); and

(3) the Dept. of Consumer Protection will ensure competition and prevent concentration of ownership (i.e., monopoly), including, but not limited to, establishing licensing requirements for backers (Sec. 24).

Not permitting home grow in the bill is “an example of the corporate cannabis market flexing its lobbying muscle” according to one critic. It leaves consumers no other legal choice but to buy their recreational cannabis from a licensed retailer.

The lack of firm protections against a single backer or entity owning numerous cannabis establishments, whether they are within the state of CT or not, invites monopolization and domination of the CT cannabis industry by large corporate cannabis corporations and investors, including those that have been tremendously successful in their operations in other states with no ties to CT.

The State of Connecticut has implemented somewhat effective monopoly-protections in the area of liquor permits for package stores. For example, a single person cannot own an interest in more than five liquor retail permits. Conn. Gen. Stat. Sec. 30-48. The limit was originally set at two but it has been increased beginning in 2012 until it rose to the current limit of five.

By contrast, the State failed to implement any limits on the joint ownership of medical marijuana businesses by a single person, and, likewise, the governor’s bill to legalize recreational cannabis again fails to impose any such limitation.

The bill is far from final and will be subject to a public hearing and likely undergo revisions. Legalization of recreational cannabis in Connecticut remains a controversial topic, but there appears to be a consensus that if it really is inevitable, that it should done right and done in a way that most benefits Connecticut residents.

Connecticut small business owners and entrepreneurs interested in starting a recreational cannabis business after it becomes legal are encouraged to act now by contacting their state representatives to protect their ability to enter this industry when that day comes.

For further inquiries about Connecticut legal cannabis businesses, both medical and recreational, as well as Hemp and CBD-related inquiries, please contact Brown, Paindiris, and Scott, LLP.