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May 26, 2022

Lamont signs into law several changes to CT’s recreational cannabis law

HBJ Photo | Sean Teehan Gov. Ned Lamont attends the recreational marijuana bill-signing ceremony.

A bill that passed in the General Assembly during the recently completed session made a plethora of changes to the state’s recreational cannabis law, including several related to ownership requirements for social equity partnerships and how they conduct businesses.

Gov. Ned Lamont on Tuesday signed into law House Bill 5329. It makes several changes to the original marijuana legalization law that Lamont signed last June. 

Here’s a look at tweaks the legislature made based on recommendations from the Social Equity Council:

Equity joint ventures

The law allows an existing medical cultivator to create up to two equity joint ventures (EJVs), subject to approvals. Previously, there were no limits on the number of EJVs one entity could do.

“That allows for more of a diverse marketplace,” said the Social Equity Council’s Communications & Legislative Program Manager Kristina Diamond. “That was one of the first priorities that the Social Equity Council was looking to put forward.”

It also sets a deadline of 14 months for medical cultivators to create and establish their EJVs.

“There was no timeline set for these businesses to stand up and open. So it would have allowed the producer or the partner to get the license and possibly sit on it in perpetuity, or for a very, very long time, and those social equity applicants who are the partners would never go into business,” Social Equity Council Executive Director Ginne-Rae Clay said.

Further, the Social Equity Council is now prohibited from approving any EJV applicant that shares an owner with another EJV, meaning one social equity applicant couldn’t have several such businesses in their name.

“It’s designed to give opportunities to more than one person,” Clay said. “Most of these things were done to protect the social equity applicant, to level the playing field and to open up the market to as many people as we can.”

H.B. 5329 also prohibits a licensed cultivator, including its backer, from increasing its ownership in an equity joint venture in excess of 50% during the seven-year period after a license is issued by the Department of Consumer Protection.
“We did some sampling of some agreements, and we knew that in some agreements, just based on hearing from social equity applicants, that some of the backers or some of their partners were looking to sort of write them out of the agreement over the course of the first few years of the business,” Clay said.

Other changes

The law also removes the density cap that limits municipalities from approving retailers or micro-cultivators based on their population. Language in last year’s law said that towns can have one of each for every 25,000 residents.

Among other changes, the General Assembly also passed language prohibiting out-of-state entities and individuals from advertising cannabis or related services in the state, and limits cannabis billboard advertisements to running between 11 p.m. and 6 a.m. Advertisements are also prohibited within 1,500 feet of specified buildings like schools.

The state also imposed limits on when cannabis may be gifted, sold, or transferred between individuals and put in place penalties for violating these restrictions.

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