Connecticut’s Social Equity Council has approved social equity status for six cannabis equity joint venture (EJV) businesses and revoked five prior approvals from 2022. These decisions will significantly impact two major players in Connecticut’s cannabis industry. This article will delve into what equity joint ventures are, the impact of the Social Equity Council’s decisions, and what it means for the cannabis industry in Connecticut.
What are Equity Joint Ventures?
An equity joint venture is a business that is at least 50% owned and controlled by an individual or individuals that meet social equity criteria. Existing medical marijuana producers and dispensaries can create such entities. The goal of equity joint ventures is to provide opportunities for individuals who have been disproportionately affected by the war on drugs, specifically communities of color, to participate in the legal cannabis industry.
Social Equity Council’s Decisions
All six EJVs approved on Tuesday are backed by Chicago-based Verano Holdings, which also operates Rocky Hill grow facility CT Pharma. The approvals will allow Verano Holdings to move forward with its six planned EJV dispensaries in the state, with the Newington and Norwich retail locations expected to open first in the coming months. The Social Equity Council’s approval of Verano Holdings’ EJV applications will significantly impact the cannabis industry in Connecticut as it allows for the creation of more opportunities for social equity applicants to participate in the legal cannabis industry.
The Social Equity Council also voted to deny five other equity joint venture applications social equity status. The council said it had already approved the maximum number of EJVs for the companies denied, which was limited to two per establishment in an amendment to the state’s legal cannabis law last year. This decision means that these companies will not be able to participate in the legal cannabis industry in Connecticut as equity joint ventures, which limits opportunities for social equity applicants.
In addition, the Social Equity Council withdrew its previous approval of five EJV proposals from Fine Fettle. The company was approved to open six EJV adult-use dispensaries with social equity applicants last September. Still, since then, the state has amended the legal cannabis law to prohibit social equity applicants from having ownership across multiple EJVs. This decision means that Fine Fettle’s first EJV adult-use dispensary opened in Manchester in February, but the other five will be on hold for now. This decision will impact Fine Fettle’s existing social equity partners and limit opportunities for social equity applicants.
Impact on the Cannabis Industry in Connecticut
The Social Equity Council’s decisions will impact the cannabis industry in Connecticut, especially for social equity applicants. The approval of Verano Holdings’ EJV applications will provide more opportunities for social equity applicants to participate in the legal cannabis industry. Still, the denial of social equity status for five equity joint venture applications and the revocation of Fine Fettle’s EJV proposals will limit opportunities for social equity applicants.
The legal cannabis industry in Connecticut has reported about $12 million in revenue through the week of Feb. 28. The state’s legal cannabis program aims to promote social equity and provide opportunities for individuals who have been disproportionately affected by the war on drugs. The decisions made by the Social Equity Council will impact the achievement of these goals and the growth of the legal cannabis industry in Connecticut.
