Connecticut’s Social Equity Council recently learned that the millions of state-allocated cash it failed to spend in Fiscal Year 2022, which ended two months ago, must return to the state’s general fund. This is just the latest in a series of blunders made by the Council, including struggles with member attendance, abandoning public commentary and leaving itself open to a dozen lawsuits from disgruntled license applicants.
The state’s budgetary clawback cuts into funding council members assumed would be available for their planned 2023 work development, technical assistance, and business accelerator programs.
Beyond approving social equity status for adult use cannabis license applicants, the SEC has been charged with developing several programs to better enable social equity applicants to succeed. The full extent of how much of the $3.9 million the council was expecting would no longer be available because at least $1.5 million will return to the general fund, the council had determined how much more could go with it.
“I look forward to gaining clarity on exactly what we’re working with and ensuring that the work of this Council is not disrupted based on the cadence of the dollars coming in,” said SEC Chair Andrea Comer, during a Sept. 7 meeting,
The SEC’s budget for Fiscal Year 2022, which ended on June 30, was $3.9 million. By that date, the Council had only spent about $239,000, according to a report from Council Finance Committee Chair Christine Shaw, made during the SEC’s Sept. 7 meeting.
“We previously thought that those unspent funds would be rolled over to FY 23 and that they would be available for workforce development, technical assistance, and the accelerator program,” she said, before noting that her committee had not yet fully assessed the impact of the unexpected shortfall. “There are other revenues that are coming in that have been earmarked. Those are revenues associated with licenses and the like.”
Shaw then said that the committee would need more “supporting details” to fully assess how much of the roughly $3.6 million that went unspent is lost.
“How much money is going back to the general fund?” asked Jefferson. “Do we have a record of that? How much money are we not spending? I’m sort of alarmed by it, quite frankly.”
Council member Avery Gaddis, who has experience working with the state legislature, explained that as far back as May, he tried to alert the SEC about an amendment added to that session’s Fiscal Year 2023 budget bill that specifically stripped any funding the SEC had not used in the previous fiscal year. Gaddis did not identify who on the Council he had previously alerted.
“It was like this prior [to May]. Someone Snuck that language into the budget bill. I saw, I raised a flag, and here we are,” he said. “If you don’t use the money, they’re going to take the money. That’s just the way it works.”
Financial woes aside, the Council also voted on Sept. 7 to approve even more social equity cannabis license applicants.
Among those approvals, lottery winners for two microbusiness cultivators and six retailers, have all been moved to the provisional license process. During which, the Department of Consumer Protection conducts criminal background checks. Applicants move to the DCP when the maximum threshold for approved lottery winners is reached by the SEC. This means that applicants for delivery, transporter, hybrid retailer, packager and product manufacturer still need to wait for one additional approval from the Council for their respective license type.
So far, the Council has also approved 16 cultivators out of 41 applicants and 9 equity joint ventures out of 33 reviewed. The final vote for those remaining license types is anticipated in the first week of October.
There is still a lot of uncertainty for the cannabis’ immediate future in the Nutmeg State. The Council is hoping to wrap up its involvement in the first round of adult use lotteries next month. Meanwhile, 11 lawsuits appealing the Council’s decisions have been consolidated into a single case.