Debra Borchardt
Two neighboring states launch legal adult-use cannabis programs within weeks of each other, so the comparisons can’t be avoided. In this round, Connecticut clearly wins. The state began its first sales of adult-use cannabis on January 10 at several locations. The operator with the most stores open on the first day was privately owned Fine Fettle. Chief Operating Officer and Co-founder Benjamin Zachs said his company was processing as many as 85 orders an hour at its Stamford location. With boxes of donuts to great customers, ecstatic employees guided shoppers into the store to complete purchases. Fine Fettle opted to ask customers to make their purchases online to avoid lines and traffic issues and that seemed to control the unbridled enthusiasm from consumers.
He also noted that he started applying for the proper permits almost immediately after legalization was approved. He seemed surprised that the larger operators hadn’t done so leaving bigger players like Acreage Holdings (OTC: ACRHF) to only have one location open for the first day of sales. Acreage Holdings has long been in the state as a medical operator, but only the Montville location was receiving customers at its store named The Botanist. Shoppers were greeted with free coffee and a warming tent, stocked with complimentary company merchandise as they proceeded to make purchases. Walk-ins were welcome and with an army of smiling employees, the line moved quickly. Acreage said its other locations would be open by the end of the month.
The big product news of the day was gummies. Medical consumers had a plethora of edible choices, but not gummies. With the launch of adult-use sales, gummies got added to the form factor list. Zachs noted that gummies were selling very well as consumers were excited to finally have that option. He also said he expects more edible options to hit the shelves shortly.
Despite the various stores being open, the flower still only comes from the four licensed cultivators in the state. So, consumers were likely buying flower from Curaleaf (OTC: CURLF), Advanced Grow Labs (AGL), Theraplant, or CT Pharmaceutical Solutions. That is expected to be expanded as the market opens up.
“Today marks a turning point in the injustices caused by the war on drugs, most notably now that there is a legal alternative to the dangerous, unregulated, underground market for cannabis sales,” Governor Lamont said. “Together with our partners in the legislature and our team of professionals at the Department of Consumer Protection, we’ve carefully crafted a securely regulated market that prioritizes public health, public safety, social justice, and equity. I look forward to continuing our efforts to ensure that this industry remains inclusive and safe as it develops.”
Taxes overall seemed low. The state charges a 6.35% sales tax plus 3% to the town and then a 10-15% THC tax. For example, a purchase of a $33 1/8th resulted in a final price of approximately $41.
“Thanks to the leadership and advocacy of Governor Ned Lamont, the Department of Consumer Protection, local communities, our team members, medical cannabis patients and cannabis supporters, Connecticut’s adult-use program will generate significant tax revenue and economic benefits throughout the state for years to come,” said George Archos, Co-Founder and CEO of Verano.
Also notable was that days before legal adult-use sales, Governor Lamont announced that the state had expunged almost 43,000 records for cannabis-related convictions. “An old conviction for a low-level cannabis possession shouldn’t hold someone back from pursuing their career, housing, professional, and educational aspirations,” Lt. Governor Susan Bysiewicz said. “Governor Lamont and I welcome this change to help people regain their freedom and the opportunity to pursue the careers and jobs they rightfully deserve.”
The retailers in Connecticut that have been licensed to sell cannabis products to all adults aged 21 and older include:
- Affinity Health and Wellness (New Haven)
- The Botanist – Danbury (Danbury)
- The Botanist – Montville (Montville)
- Fine Fettle Dispensary – Newington (Newington)
- Fine Fettle Dispensary – Stamford (Stamford)
- Fine Fettle Dispensary – Willimantic (Willimantic)
- RISE Branford (formerly Bluepoint Wellness of Connecticut) (Branford)
- Still River Wellness (Torrington)
- Zen Leaf Meriden (formerly Willow Brook Wellness) (Meriden)
However, not all locations are open to adult-use sales yet.
New York Comparisons
New York so far has only opened one legal adult-use dispensary in Manhattan. The non-profit Housing Works opened its doors on January 30, just squeaking by to meet the Office of Cannabis Management’s goal of sales beginning in 2022. Numerous illicit dispensaries are operating in every borough and while a few high-profile closures and raids have occurred, they are mostly operating with no pushback from the city.
Unlike Connecticut, New York’s medical operators were rejected from having first dibs on adult-use licenses. Despite years of efforts and millions spent on building money-losing operations, the medical operators now find themselves caught in a verticle market conundrum. They have spent millions and signed long-term contracts for cultivation, only to learn that on the adult-use side, they have to pick a lane. Roughly retail, cultivation, or distribution. Since most have long-term facility investments, they are likely stuck in the profit-challenged cultivation lane.
Connecticut’s launch also seemed more subdued than New Jersey, which began its adult-use sales in April 2022. That state opened many locations owned mostly by large MSO’s on the first day. Those openings were marked with balloon sculptures, food trucks, political dignitaries and energetic music in the parking lots. In other words – Jersey. While the understated ways of staid Connecticut were quietly marked with coffee and donuts.
