A Connecticut panel charged with ensuring the equitable issuance of cannabis business licenses reversed course Monday and voted to reconsider the applications of a handful of companies it had previously denied as failing to meet its criteria.
The state Social Equity Council clarified its requirements for the level of ownership and control an applicant from an area disproportionately impacted by the war on drugs must maintain in a joint business venture with outside financial backers. After approving the new language, the panel voted to reconsider some of the applicants it had previously denied.
“Without admitting that the council erred in denying the license or otherwise failed to follow appropriate procedures, I believe it would be in the best interest of the council to reconsider these applications,” Ojala Naeem, a member of the council, said.
The panel voted to allow Brownstone Sales LLC, Leaf CT LLC, Let’s Grow Hartford LLC, Shangri-La CT Inc. and White Oak Apothecary LLC to resubmit their social equity applications.
At least one of those companies has already won the right to apply for a license. Shangri-La, a Missouri-based cannabis company, won two of the six general applicant retail licenses, after also winning one of the six social equity retail licenses.
The decision comes as the state faces lawsuits from multiple companies denied by the council. Eleven such complaints have been consolidated in New Britain Superior Court, with many of the plaintiffs arguing that the panel was late to disclose its rules on ownership and control, leaving them no time to adjust their applications.
According to Andrea Comer, a deputy commissioner of consumer protection who serves as chair of the panel, the new language requires that the social equity applicant “exercises operational authority over daily affairs of the business, has the voting power to direct the management, agents and policies, and receives the beneficial interests of the business.”
The council voted nearly unanimously to allow the companies to resubmit their applications. However, Michael Jefferson, a member of the panel, abstained from the vote and worried whether the group was setting a precedent that would give all denied companies a “second bite at the apple.”
“I just want to make sure that we recognize we’re establishing a precedency because folks are going to use this in the future when they’re denied,” Jefferson said.
Naeem said she expected the resubmissions would be more narrow.
“It may set an expectation that we will be doing it for every application that is denied and I don’t think that that will be true. I think it will be based on the criteria that it has been denied on,” Naeem said.
During Monday’s meeting the council also approved the social equity status of one cannabis product packager and four joint equity venture applicants. Those applications will now go to the Consumer Protection Department for consideration.
“I am excited we have approved the social equity applicants in the product packager license category,” Ginne-Rae Clay, executive director of the council, said in a press release. “These approvals bring us closer to the opening of the cannabis market.”
Connecticut legalized possession of small amounts of cannabis last year through the same law that created the Social Equity Council to ensure that members of disproportionately impacted communities received fair access to the new industry. Commercial sales of the substance are expected to begin near the end of this year, a spokesperson for the Department of Consumer Protection said last week.