Regulators in Connecticut should prepare to provide technical and financial assistance to ensure social equity among adult-use cannabis license applicants while also limiting the flow of approved applicants in general. The advice came from the head of Washington’s nine year-old state cannabis program during a Nov. 2 meeting of the Connecticut Social Equity Council.
Washington became one of the first two states in the country to legalize adult-use cannabis in 2012 following a successful ballot initiative. Prior to the vote, the state had an existing, unregulated medical cannabis market that had to be integrated into the newly approved adult-use program. Two years later, the state merged its liquor and cannabis regulatory agencies.
“When the initiative passed, one of the first things we had to do, to determine how much cannabis we needed to grow, was to determine in fact the amount of cannabis in metric tons was being consumed in our state by those over 21,” said Richard Garza, director of the Washington Liquor and Cannabis Board.
Garza suggested setting caps for a slower roll-out of the market and to make sure there is a large enough gap between cultivators being licensed and retail stores opening to allow cultivators more time to meet the market’s demand.
“There was an under supply of cannabis in the marketplace. We were selling grams for $30,” he said. “Over time, as more producers come online, we did have an oversupply and the prices tumbled to where we were selling grams for less than they were selling in the illicit market.”
Garza said that Washington, which does not allow home grows for adult-use, still had illicit grow operations, but that they were primarily distributing the flower over state lines.
“If I grow illicitly in Washington, there’s no market for it,” he said.
In order to address social equity concerns, Garza insisted that Connecticut create a fund for a portion of the revenue the state will get through cannabis licensing and taxes. That fund could be used to provide technical assistance to equity applicants.
“People who have the money will have the lawyers to help them get through this app process quicker and faster,” said Garza. “I can tell where those folks lie. they’re typically not in communities of color. You can’t let other folks get to the front of the line because they have the money. With no banking from the national banks, it seems very likely that only those who have the capital or have someone to finance or invest in the business will get in. The government has to step in with that revenue.”
He said that the state originally expected 100 applications for cultivator licenses, but Washington received 2,858.
“We had this huge application pool that came in,” he said. “It’s very likely that there will be many, many more applications than you’ll expect.
Social Equity Council member Melissa McCaw said that the state was already considering phasing in licenses over time to avoid a glut.
“We have included in our revenue structure, reinvestment back into the community,” said McCaw. “I assure you reinvestments will occur.”