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December 9, 2021

Here are the requirements, criteria for social equity cannabis business applicants

Skyler Frazer Social Equity Council Finance Committee Chair Christine Shaw speaks during the council's Dec. 7 meeting.
By Skyler Frazer

The Social Equity Council earlier this week approved a plethora of guidelines and requirements for prospective adult-use cannabis businesses.

Per the approved guidelines, a business qualifies as a “social equity applicant” if it is at least 65% owned and controlled by individuals who had an average household income of less than 300% of the state median household income over the three tax years immediately preceding the application.

Here’s a look at some other criteria that was approved Tuesday:

Social equity plan criteria
SEC policy committee chair Edwin Shirley said the first part of the social equity plan will include a 300-word or less “statement of purpose” summarizing the objectives and goals of the prospective business in terms of social equity. The plan must include at least two goals, but applicants are encouraged to submit more. 

Strategies about how the business would achieve those goals, and how they’d measure progress, must also be included.

“Our understanding is that the social equity plan is required of all applicants, not just social equity applicants but everyone has to submit one,” Shirley said.

Ownership and control requirements
The ownership and control requirements essentially consist of a long checklist of documents that business applicants must submit, including an organizational chart, owners’ resumes, net worth statements and among more than a dozen others.

Workforce development plan requirements
Part of the Social Equity Council’s responsibilities include ensuring applicants’ workforce development plans are focused on reinvesting or providing employment and training opportunities to individuals who live in areas that have been disproportionately impacted by the war on drugs.

Policy committee chair Kelli-Marie Valleries said Tuesday the committee narrowed down its template to a seven-question checklist that applicants will have to pass ahead of approval. Valleries, one of the governor’s appointees to the SEC, serves as the executive director of the Connecticut Office of Workforce Strategies.

The questions ask applicants to describe and outline the work they plan to do to accomplish specific social equity goals. Applicants will be expected to meet all criteria to qualify for a license.

Income and residency requirements
Income and residency requirements for social equity applicants hoping to operate as equity joint ventures were also approved, contingent on the SEC’s future approval of an implementation plan for accelerator and technical assistance programs, which will provide business support to potential applicants.

The guidelines will be finalized at a special meeting at a later date.

Applicants must submit a notarized proof of income letter plus another supporting document. The other documentation could include things like three years of pay stubs, three years of tax returns, or a pension or retirement fund statement.

For proof of residency, applicants will have to submit a Connecticut driver’s license or identification card and Social Security card, a birth certificate and one of several other items that could include property deeds, bank records, or school records.

Subira Gordon, co-chair of the SEC’s outreach committee, said the committee looked at existing requirements in other states and cities for guidance on what to include.

She said she’d bring a more simplified, easy-to-understand version of the income and residency requirements criteria at the SEC’s next meeting.
 

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