Connecticut’s Social Equity Council is taking a “wait and see” approach to determine the best way to allocate $50 million in resources to support the new adult use market in the state.
“There has been discussion of three very distinct opportunities to support the cannabis licensing process,” said Christine Shaw during the Council’s Mar. 17 meeting of its Finance Committee. “There are different pots of money that will be available at different points in time.”
The Council has been allocated $50 million to support operators and aspiring operators for the fiscal year 23 budget, which officially starts July 1.
Prior to that, the Council was budgeted $1 million for technical assistance and its accelerator program, which is still waiting for the state to issue its first provisional adult use cannabis license.
The support includes technical assistance for individuals that need help completing the application process, accelerator assistance, which will offer administrative and management consulting support, and incubator assistance, which will come in the form of small business loans. Financial assistance will also be provided to nonprofits and municipalities.
The state began accepting applications for cannabis packager licenses on Mar. 17. The state staggered the opening of application windows for certain licenses, which started in the first week of February. Since then applications for retailers, micro-cultivators, product manufacturers, medical adult use-medical hybrids, delivery services, and food and beverage operations.
Next week, the application window for the final license type will open, which will be for transporters.
Connecticut regulators have received 124 general and 19 social equity license applications, as of Mar. 17, according to data from the state. Each license type has a cap for approval in this first wave of licensing, meaning no more than 28 general and 28 social equity licenses will be issued through the lottery.
The first wave of applicants have 90 days before the application window closes, based on when it originally began. The windows will start closing in the first week of May. The state is planning to hold subsequent waves of application windows, with the next one set for around the end of the year.
Once the Social Equity Council has a better idea of how many social equity applicants there are, it can better assess the financial needs of their support programs, according to Shaw.
“When these programs get to capacity, I think we’ll have a better idea of the budgetary needs,” she said.
Committee member Edwin Shirley said that the Council should also rank its priorities and the industry’s needs considering the strong possibility of unintended expenses.
“The various licenses obviously will require different amounts of capital,” he said. “In addition to looking at how we might apportion that, we may also want to consider some kind of hierarchy, based on what we think is most important. $50M is not really a big fund, particularly for the cannabis business.”
Shirley also noted that the council is going to have to designate an approval committee to process loan applications.
“There will be a due diligence committee that will review the applications, as with any loan program,” he said. “We don’t have that right now. It’s one of the key items that still needs to be established.”
