John Schroyer
Connecticut cannabis regulators decided to pause the business permitting process for new marijuana market entrants and confirmed to CT Insider recently that a second lottery for recreational cannabis licenses won’t be held until the legislative session concludes on June 7.
That’ll delay the further development of the adult-use market – which just launched in January – but perhaps only by a few months. So far, the state has only awarded 35 recreational retail permits, and only 13 of them are operational, CT Insider reported.
However, that may give lawmakers enough of a window to dramatically reshape who ends up winning permits. And some legislators suggested there could be other major shifts on the way as well.
State Rep. Jason Rojas, for instance, is running a bill to limit the number of applications that a single person or business can submit for the lottery. The goal is to even the economic playing field so that less-capitalized entrepreneurs have the same chance of winning a license as large companies that can afford to spend money on hundreds of applications.
That was a strategy employed by two license winners in the first lottery – Slap Ash Inc. and Jananii LLC. Both spent several hundred thousand dollars in order to submit more than 800 applications, CT Insider reported.
“We want to come out with one application per applicant,” Rojas said.
There are additional tweaks that also may be made, so that the true owners of businesses submitting lottery applications for cannabis licenses are known to regulators as well, Rojas said.
Another potential reason for regulators to slow down the licensing process, Rojas said, is to ensure that too many operators don’t launch at once, which would likely lead to a price crash – something that has happened in several other state marijuana markets.
Rojas pointed to neighboring Massachusetts as a cautionary tale, where there are 280 licensed recreational dispensaries.
“I think that’s proven to be way too many, which has all sorts of ramifications for sustaining the integrity of the program,” he told CT Insider. “There are signs out there from other states that we should be attentive to and being careful with how many licenses we do put out there.”
