$59 million paid so far in CT Cannabis licenses
The state has so far made more than $59 million in cannabis license fees, according to state data. The majority of that will pay for as-yet-undefined social equity initiatives.
According to data provided by the state Department of Consumer Protection, the state received a total of $59,606,895 as of Wednesday.
Most of that, $48.5 million, comes from license fees paid by social equity applicants. Of that $48.5 million, $33 million was paid by the 11 cultivators so far licensed in disproportionately impacted areas.
According to state law, license fees paid by social equity applicants are deposited into a social equity fund and used to pay for costs associated with the Social Equity Council and community reinvestment initiatives in areas disproportionately impacted by the drug .
The fund will be set up at the close of this calendar year, said Social Equity Council spokesperson Kristina Diamond, though precisely how the money will be used has not yet been decided.
The Social Equity Council's community reinvestment committee meets Monday to vote on a draft community reinvestment plan. Diamond said the money is intended to "go into the communities that have been negatively impacted by the war on drugs."
“Phase one, the council was obviously working on opening the marketplace and now we will be focusing our efforts on this community reinvestment,” Diamond said. “The part that I'm excited about is the community reinvestment. I can't wait to be able to start putting funding into the DIA communities and seeing the results of all of our hard work putting that money into those communities.”
The idea of funding social equity initiatives with license and lottery fees was, according to DeVaughn Ward, senior legislative counsel at D.C.-based Marijuana Policy Project, possibly unique to Connecticut. The four existing medical cannabis cultivators were required to pay into the social equity fund through license fees if they wished to transition to hybrid cultivation,
“Being able to charge these four producers a licensing fee that was, in turn, used to support equity efforts was also a pretty novel concept, too,” he said. “And I think a pretty interesting way to go about it.”
In addition to the $48.5 million in social equity license and lottery fees, $11,106,895 was paid by businesses seeking licenses related to Connecticut’s recreational cannabis market, all of which is by law deposited into the state’s general fund.
The largest pool of funds from recreational cannabis businesses, $5,850,500, was garnered from lottery fees and application fees paid by retailers. The lottery fee for a retailer seeking a recreational license was set at $500. Once granted, a provisional license cost $5,000, with the final license fee set at $25,000.
An additional $2,414,520 in lottery and license fees were paid by hybrid retailers, selling both medical and recreational cannabis.
There was no limit to the number of applications a single applicant could submit. At least two companies, Slap Ash, Inc. and Jananii LLC, each spent more than $200,000 to submit more than 800 lottery entries.
Critics of the lottery process argued that unlimited applications made the process inherently unfair. Jason Ortiz, executive director of Students for Sensible Drug Policy and past president of the Minority Cannabis Business Association, had hoped to get a retail license but ultimately decided against it.
“I actually decided that I did not want to put my name into the hat with a lottery system because I felt like the lottery was getting rigged,” he said.
Delivery services have so far paid $193,625 in lottery and license fees. So far 12 provisional licenses have been granted for cannabis delivery services.
Micro-cultivators have paid $1,429,000 in license and lottery fees, and six micro-cultivator provisional licenses have been granted.
Cannabis food and beverage manufacturers have paid $566,125 in lottery and license fees. Ten such licenses have so far been granted.
