John Schroyer
Although the Connecticut recreational marijuana industry just launched in January, one longtime medical cannabis patient, advocate, and volunteer lobbyist says the market is in jeopardy of being taken over completely by multistate operators who want to crowd out competition from local entrepreneurs.
Social Equity Partners
Several social equity permits already are controlled by large multistate companies, according to various media reports and the companies themselves, including:
- Acreage Holdings (OTC: ACRHF)
- Curaleaf (OTC: CURLF)
- Green Thumb Industries (OTC: GTBIF)
- Verano Holdings (OTC: VRNOF)
The MSOs landed “equity joint ventures” that allow them a 50% license discount – $1.5 million instead of $3 million – if they partner with a qualified social equity applicant.
That’s tantamount to corrupting the entire spirit of the social equity approach, said Louis Rinaldi, a medical cannabis patient, since the point of social equity was to repair harms wrought on minorities by the war on drugs, not to give market share to large companies run largely by white men.
The Connecticut Social Equity Council, Rinaldi said, has been “essentially co-opted by the Connecticut Cannabis Chamber of Commerce as well as Acreage Holdings … and possibly others, other MSOs, to help advance their legislative agenda in the state. And this agenda is in service to maintaining and maximizing market share, at the expense of local small business owners. That’s really the meat of the whole thing.”
Proposed Hemp Bill
Rinaldi alleged several of those companies are also trying to torpedo a legislative bill that would allow scores of hemp farmers to convert their businesses to adult-use marijuana growing. The number of licensed hemp farmers in the state has shrunk by nearly 50% already, from 140 three years ago to 78 in 2022, due to a national hemp market crash, the CT Examiner reported this month.
Time is growing short, however, since the legislative session adjourns on June 7, and the bill to give hemp farmers a path into the recreational marijuana market has been stalled since March. That means its chances of success now are slim.
Meanwhile, the state Department of Consumer Protection – the agency responsible for awarding more recreational licenses – put permitting on hold until at least next week, in case lawmakers do make substantial tweaks to which the agency will have to conform.
Rinaldi cited various media reports from CT Insider and the Hartford Courant, which reported that even one of the primary authors of the recreational cannabis market, state Sen. Gary Winfield, is disappointed in how social equity has been implemented.
“I am not a person who stands there and defends this as the best thing ever. I’m a person who says, we had a process. We tried to weigh everything,” Winfield told CT Insider in March. “From the perspective of some folks, we’re going to get it wrong.”
The bottom line, Rinaldi said, is that larger companies are “all using social equity as a smoke screen here.”
“It’s a lot of rich white folks who have ended up benefiting from this,” Rinaldi asserted.
