Cannabis License winners in CT spent big to come out on top
Winners of CT cannabis licenses spent hundreds of thousands of dollars to improve chances in lottery.
The businesses that won approval for licenses to grow and sell cannabis in Connecticut spent hundreds of thousands of dollars in total to submit thousands of applications to improve their chances of being selected in the lottery.
The winning applicants for retail and micro-cultivator licenses flooded the lottery system with entries, according to new data from the state Department of Consumer Protection. Take retail licenses as example. SLAP ASH LLC, which lists a business address in Glastonbury, accounted for 850 of the 8,360 applications submitted to the social equity lottery in the initial round, ultimately winning approval for two licenses.
In another example, Jananii LLC, which like SLAP ASH spent over $200,000 to submit more than 800 lottery entries, to won approval for a retail license. The company, which lists a business address in Clarksburg, Maryland, has yet to receive a provisional license. Social equity applicants not selected in that lottery were able to enter the general lottery.
Application fees vary depending on license type with the price of an entry for a social equity applicant to the retail lottery costing $250. Winning applicants must also pay licensing fees after passing background checks and other reviews.
Critics of Connecticut’s process for selecting cannabis licensees had warned that with unlimited entries allowed, the lottery system would favor multi-state corporations and wealthy individuals who would submit an outsized number of applications. Most license types are awarded through a lottery system with half of all licenses reserved for equity applicants who apply through a separate lottery from non-equity applicants. Several applicants denied equity status are suing the state over its licensing process.
Three of the businesses that received approval for the four micro-cultivator licenses available in the initial around filed 40 percent of all applications submitted to the social equity lottery. At the top of the list is Chillax LLC, with a business address is Somerset, New Jersey, which spent nearly $95,000 to submit more than 750 applications. Micro-cultivators, who can grow cannabis for recreational and medicinal use, have smaller facilities than cultivators, at 2,000 to 10,000 square feet of grow space. DCP has yet to release data on the number of applications filed by applicants for other license types such as cultivator and food and beverage manufacturer.
Connecticut’s adult-use cannabis law, passed in 2021, sought to establish an equitable marketplace in large part by creating opportunity for communities disproportionately targeted by past criminalization to participate in the legal market. But the law’s lofty equity goals have largely failed to materialize.
One indication of that is the list of names behind the cannabis businesses slated for approval, which include a former state senator, a previous commissioner of the department of consumer protection, and companies with cannabis operations in other states. Several of the partnerships include equity applicants and wealthy backers. In order to obtain a social equity license, an applicant must meet residency and income requirements and must own at least 65 percent of the company.
