The State of Connecticut has settled with eleven would-be applicants for cannabis cultivation licenses who sued after they were denied social equity status. The consolidated case featured 14 plaintiffs, meaning that despite the settlement, there are still three plaintiffs actively pursuing litigation.
Aside from the consolidated case, there are also three additional cases pending in Superior Court from prospective operators EJ Ventures, Red Barn Farms, and New England Edibles.
Gunter Investments, Green Meadow Farm CT, and Shangri-La, a Missouri-based MSO that already received a second chance on their multiple applications, are the remaining unsettled parties in the lawsuit.
Although three plaintiffs remain, the stipulation allows the Department of Consumer Protection and the Department of Economic and Community Development to be dismissed from the case.
“The Parties represent and agree that defendants DCP and DECD did not render administrative decisions relating to the Plaintiffs’ social equity status,” reads the stipulation agreement.
The state has a limited number of adult use cannabis licenses in its first round of issuances based on lotteries, but cultivation was exempt from the lottery and open to anyone, provided applicants could prove their social equity status.
On July 19, the Social Equity Council approved 16 prospective cultivators, while denying 25.
Shortly after the state’s Social Equity Council disqualified a majority of cultivation applicants, not to mention subsequent lottery winners, the state has agreed to allow some of those failed applicants to try again.
Over the last few months the state’s Social Equity Council has been approving and denying a series of prospective adult use cannabis license holders, largely based on the respective applicant’s ownership mix and whether or not they live within one of the state’s 200 disproportionately impacted areas.
“The Plaintiffs allege, among other things, that the Council failed to properly promulgate, misidentified, improperly applied and/or changed the criteria for control during the application period,” said the 22-page stipulation order. “The Council denies these allegations.”
The state denied those allegations, but agreed to settle the matter by allowing the cultivation applicants to resubmit their bids with clarified ownership details.
A spokesperson for the SEC confirmed that the Council had settled with 11 plaintiffs, but declined to comment further as a litigation is still pending.
Cultivator licenses are among the few adult use licenses in the state not subject to a lottery. The Social Equity Council approved 16 of 41 applicants during its June 12 meeting.
The majority of failed applicants were denied based on their supposed failure to clearly show that at least 65% of the control and management of the prospective business rested on an individual who qualified for social equity status based on their income for the previous three years and their residency in one of the state’s Disproportionately Impacted Areas. Prior to opening the application process, the state identified 200 out of the state’s 833 Census tracts, based on conviction statistics from the federal War on Drugs.