CT Company Receives $600,000 To Screen Some Cannabis License Applicants

As Connecticut establishes its legal weed market, the state gives licensing preference to so-called social equity seekers who live in areas that have been targeted by drug enforcement in the past.

It’s a move taken by a growing number of states where adult cannabis use is now legal, as they seek to address disparities in the war on drugs and enable targeted communities to participate in the market. legal. States have different approaches to creating racial equity in an industry dominated by white business owners.

In Connecticut, half of all licenses are reserved for social equity applicants, who must meet established income, residency and business ownership thresholds. Most cannabis license applicants in Connecticut have to go through a lottery system compared to the merit-based system that exists in other states.

To help navigate a new industry in the state, the Social Equity Council overseeing this process turned to a major auditing and accounting firm, CohnReznick. The company is responsible for developing a system for reviewing equity applicants to ensure they follow the rules and recommending applicants for approval or rejection. The contract is worth up to $600,000 and is in effect until December 31.

Although the board has the final say on whether an applicant proceeds to the interim clearance stage, it has rarely, if ever, strayed from CohnReznick’s recommendations. So far, the board has approved 16 grower applicants, six retail applicants and more than a dozen other equity applicants for licenses ranging from food and drink to delivery service.

“CohnReznick was chosen for his ability to provide valuable expertise in reviewing applications, which includes complex analysis of income and residency documents and business structures,” said Kristina Diamond, spokesperson for the Council Office. of social equity.

The board hired the company earlier this year from a state list of qualified bidders. Diamond said the board, which did not have enough staff in place at the time to take on the task of reviewing applications, asked the five accounting firms on the state’s list of qualified bidders to respond. to a request proposal. CohnReznick was the only company to respond. The company contract is funded from the council’s budget.

Other states such as Washington and Illinois have also hired cannabis consultants when establishing their legal markets. In Washington, officials have hired advisers on a range of topics from how much weed to grow to how to test, label and package the product. Illinois has also hired an accounting giant, KPMG, to file cannabis applications – a process that has been criticized by a series of lawsuits that have delayed the rollout of licenses there.

Connecticut’s licensing process is also being challenged in court, with rejected applicants arguing that the state’s Social Equity Board rejected applications based on incorrect company ownership information. and arbitrary interpretations of the law. Connecticut does not pre-screen applications before the lottery — a process that sets it apart from other states. Only certain candidates can revise their application

“Connecticut is doing this in a very unique way,” said DeVaughn Ward, senior legislative counsel for the Marijuana Policy Project, a Washington, DC-based nonprofit that advocates for legalization. “It’s (too) early to tell if it will be a resounding success or if it will be a total failure.”

The approach could lead social equity applicants in Connecticut “to get licensed very quickly, to market quickly,” Ward said. “We’ll see how it all plays out.”

So far, legal challenges have not disrupted Connecticut’s rollout of its adult-use market. As of Wednesday, the state Department of Consumer Protection issued provisional licenses to five candidate growers and two candidate retailers. They now have 14 months to comply with the requirements in order to receive a permanent license.

Cultivators that have received a preliminary license include Connecticut Cultivation Solutions, LLC, Connecticut Social Equity, LLC, FFD 149 LLC, Insa CT, LLC, and Quinnipiac Valley Growth Partners, LLC. The retailers that will receive provisional licenses are Slap Ash LLC and Jack.

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