Retail sales of cannabis have been happening for almost two months, but lawmakers are looking at making several changes to it and the medical marijuana program.
One would give cannabis businesses a break on their state taxes, another would create a position for a cannabis ombudsman, and yet another would allow a licensed hemp producer to seek a micro-cultivator license to participate in the adult-use cannabis market.
There have been a few growing pains over the first few months with medical patients complaining they’ve been unable to obtain access to the products they’ve come to rely upon.
The medical community, which numbers around 50,000, is allowed up to five ounces per month. Recreational cannabis is limited to a quarter of an ounce per person.
The medical community has been pushing for an ombudsman to make sure they are still getting the product they’ve been getting for years.
Majority Leader Jason Rojas introduced legislation that would create a dedicated person to hear their concerns.
There’s another group of people in the industry complaining.
Hemp farmers have also complained that the cannabis law left them out of the equation and they want to be able to participate in the marketplace, but at the moment they have no way in.
Under federal law, hemp can’t contain more than 0.3 percent tetrahydrocannabinol, the psychoactive compound that gets you high. Once it’s past that threshold, the cannabis plant is considered marijuana.
And under Connecticut’s cannabis laws, a licensed cultivator may cultivate, grow and propagate cannabis at an establishment containing not less than 15,000 square feet of grow space.
While the Department of Consumer Protection doesn’t have an opinion on the policy, the Department of Agriculture says it supports efforts to include hemp farmers.
But at the moment, under Connecticut’s existing hemp program, which is a USDA approved state plan, a licensee cannot simultaneously hold both a hemp and cannabis license.
“We hemp farmers would be a partial solution to the state’s problem and advance the rollout of the Recreational Marijuana program if we can convert our hemp licenses,” Brant Smith, who is a hemp farmer with a greenhouse operation located in Cheshire, said. “Hemp farmers are part of the fabric of the Connecticut community and know how to grow cannabis, which is what both hemp and marijuana are.”
The problem is the state has four medical marijuana growers being the sole producers of the product for the recreational marijuana market. Smith said this has caused Connecticut to have the highest marijuana prices in the country due to an extreme shortage of product, a problem that will persist through 2024 unless there are changes made.
“I believe it would be a “win-win” for Connecticut and the farmers of our State to have the current hemp farming community able to receive marijuana licenses. Not only would more product be available to the market, but that product would be a craft product (small, high end batches) produced sustainably,” he said.
But the Connecticut Cannabis Chamber of Commerce is against it.
“Hemp farmers enjoyed the same opportunities as everyone else to apply for the social equity and general license lotteries, and continue to. The state shouldn’t reward them for avoiding the social equity-driven process, especially at the risk of creating long-term market viability issues,” said Deborah Caviness, Co-Founder of the CT Cannabis Chamber.
Kebra Smith-Bolden, RN CEO/President, NoirEnVerte, LLC/ Acreage Connecticut Cultivation JV, LLC, added, “The goal of legalization in Connecticut was to create a fair and equitable Cannabis industry, to pour funds from this industry into communities most harmed by the war on drugs and to cultivate cannabis entrepreneurs who will create jobs, opportunities and can start businesses that have the potential to change the trajectory of social equity licensees lives and legacies. Much of the proposed legislation, including HB6700, undermines the very spirit of this legislation and adds additional obstacles to the already arduous process that I am all too aware of as a Social Equity Licensee still attempting to navigate all of the hurdles necessary to start a Cannabis business in this state.”
And making sure this business works for everyone, Rojas also introduced legislation to give cannabis businesses a break on their state taxes.
The public hearing on that bill was held Wednesday by the Finance, Revenue, and Bonding Committee.
Rojas testified that decoupling the state tax code from the federal tax code when it comes to cannabis sales made sense.
The bill would provide greater parity for cannabis related businesses and provide them the opportunity to deduct business expenses that are considered “ordinary and necessary” resulting in significant federal and state tax liabilities for these businesses. This disparity is the result of section 280E of the Internal Revenue Code that disallows cannabis businesses from claiming normal business tax deductions.
