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March 6, 2024

Lawmakers consider significant changes to CT’s recreational marijuana laws; hemp farmers raise alarms

Courtesy photo Shawn Magill, left, and Jacob Honig , co-founders of TheCBGGurus, stand at their hemp farm in Harwinton.

Connecticut hemp farmers are raising alarm bells about a legislative proposal they say would further restrict their ability to sell CBD products in the state. 

House Bill 5150, introduced by the legislature’s General Law Committee, makes several changes to the state’s recreational cannabis law, which was approved in 2021 and went into effect in 2022. The state’s recreational cannabis market launched in January 2023.

More than 100 people testified during a recent public hearing on the bill, which significantly restricts the sale of hemp-based products containing trace amounts of THC.

Specifically, the bill redefines "high-THC hemp products" to include anything with one-half milligram of THC on a per-container basis. Tetrahydrocannabinol (THC) is the psychoactive compound found in cannabis, differing from the non-psychoactive ingredient cannabidiol (CBD).

High-THC hemp products — including tinctures, concentrates and  edibles — can only be sold in licensed cannabis dispensaries.

As it’s written, the law would essentially require that hemp-derived products not be sold anywhere other than licensed dispensaries, because most, if not all, hemp products contain at least trace amounts of THC. 

Currently hemp-derived products are sold in specialty CBD and other types of stores.

Opponents of the measure — primarily CBD retailers and hemp farmers  — said the proposal would deem their businesses illegal as soon as it would go into effect.

“If 5150 passes as written, it will end the hemp industry in Connecticut completely,” said Shawn Magill, co-owner of hemp farm TheCBGGurus. “As it currently stands, all of our products contain more than 0.5 milligrams of THC per container and would become illegal.”

The bill would also restrict the sale of THC seltzers and other products containing THC to dispensaries only, closing an existing loophole in the law that has allowed the products be sold in package stores, gas stations and other businesses without a cannabis license.

Mitch Ancona, owner of Ancona's Wines and Liquors that has three locations in Connecticut, asked that package stores still be allowed to sell THC seltzers as a way to strengthen their non-alcoholic offerings.

He asked for a “middle ground” in the bill that would allow package stores to continue selling drinks containing 5 milligrams of THC per container alongside dispensaries, but members of the General Law Committee pushed back against that idea.

“We’ve got, frankly, a very strong health, safety and welfare argument to make where we have said as a state — and we’ve been very consistent on this — there is a regulated marketplace for cannabis products,” state Rep. Mike D’Agostino (D-Hamden) said. “What we’re proposing is that anything above a certain minimum level of THC is cannabis, and once we say that, there’s one regulated market for cannabis.”

Hemp industry

Parts of the bill drew support from Connecticut’s hemp industry, though, as it would allow social equity applicants to enter into agreements with licensed hemp farmers for use of their cultivation space. Hemp farmers have lobbied to be included in Connecticut’s adult-use cannabis industry since they were initially left out of the sector in the 2021 law.

The hemp industry, however, would like to see the bill go a step further, to allow hemp farmers to obtain micro-cultivator licenses. Getting hemp growers involved in cannabis cultivation could help alleviate product shortages being experienced by some dispensaries in the state, said Robert Fields, managing partner with lobbying firm Zimmerman Fields and Associates.

Fields, who represents hemp growers, said there are several social equity applicants unable to open up because they can’t find spaces for their cultivation operations, and hemp farms should be allowed to help them out.

“This is a great way to be a stopgap and to help the overall adult-use market in Connecticut by allowing for more cultivators to come on,” Fields said. “Anybody with 20/20 vision can see that the hemp farmers are a lifeline to those 27 or 28 social equity applicants (struggling with finding space for their businesses).”

Other notable changes

Another section of the bill that drew pushback from existing cannabis businesses would prohibit dispensaries from engaging in “advertising or marketing that includes a discounted price or other promotional offering as an inducement to purchase” cannabis products.
Ben Zachs, chief operations officer at Fine Fettle, said prohibiting discounts on products would make Connecticut less competitive than neighboring states.

“You would never limit Costco from discounting. Our pricing is 50% higher than our neighbors. Getting consumers to be able to purchase in Connecticut is a necessity with our current market realities,” Zachs said.

During testimony, Zachs and fellow cannabis dispensary operator Carl Tirella, a founding partner of Budr Cannabis, asked the General Law Committee to reduce the moratorium on when social equity owners in an equity joint venture can sell their ownership stake. Current state law prevents an ownership transfer before seven years, but Zachs and Tirella said this could be a barrier for partners that want to sell earlier. 

They said their social equity partners have submitted testimony in favor of that change as well.

D’Agostino pushed back on that request.

“There were a lot of concerns about ‘if we let them get bought out, then they’ll sell within a year, get bought and we’ll lose the entire social equity population,’” D’Agostino said. “I appreciate what you guys are saying, but no offense, I think we need to hear from the Social Equity Council, social equity partners directly, and not rich white guys.”

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