Investments grow in medical pot dispensaries
Nearly seven years after the General Assembly approved the state’s medical marijuana program, Connecticut has more than 34,400 patients and nearly 1,100 consulting physicians enrolled in what is a national model for palliative use of the drug.
With a governor who wants full legalization for adults to purchase cannabis here — and keep the accompanying tax dollars in-state, away from Massachusetts retail shops — it would seem that Connecticut is ripe for reforms.
Over the last year, hundreds of millions of dollars have been invested by outof-state companies who have purchased two of the four medical-marijuana growers and at least two of the nine pharmacist-run dispensaries, according to documents released by the state Department of Consumer Protection under the state’s open
records law. Nine more dispensaries have been approved in what state and industry officials call a highly successful, nationally respected program.
But without a powerful legislative push, the likelihood of the several bills favoring recreational sales surviving this year is quickly is diminishing, with six weeks remaining in the legislative session. Speaker of the House Joe Aresimowicz hinted as much when he admitted to reporters that recreational sales for adults, along with sports wagering, are likely subjects for next year.
“I believe that recreational marijuana and sports gambling should be a part of the budget, obviously not this first year but year two,” Aresimowicz said. “Those are just two things that we just need to do because other states are way ahead of us in some cases, and it’s having a negative impact to the state without some of the positive.”
“I think we’ve made huge progress toward legalization this year,” said Rep. Steve Stafstrom, D-Bridgeport, co-chairman of the lawwriting Judiciary Committee, which along with the General Law Committee, narrowly approved retail cannabis bills, mostly along party lines, with some Democrats opposed. Tax-related issues are pending in the Finance, Revenue & Bonding Committee.
“The fact that two committees in this building have held votes on the bill, have voted out of committee, is a major step forward from where we’ve ever been,” Stafstrom said. “It’s never been voted on in any committee before. I think there’s a growing recognition of it’s not whether cannabis is legalized, but it’s how we go about doing it.”
Stafstrom said that some lawmakers are still grappling with the best way to roll out a regulatory structure that works; how to put in appropriate safeguards for employers; to keep cannabis out of the hands of children; and also how to deal with the mostly urban communities that were affected by the decades of disproportionate prosecution and incarceration of residents arrested with the drug.
“But we’ve gone beyond a conversation of ‘should we legalize,’ to how we legalize,” he said.
Stafstrom wants Connecticut’s eventual retail-cannabis landscape to contain some of the best elements of the laws allowing adult use in 10 states and the District of Columbia. “Is it going to be this year? I don’t know,” he said. “But I certainly think we’re moving in that direction quicker than even I had anticipated.”
While in recent years a Republican state representative from East Haddam, Melissa Ziobron, favored full legalization, last fall she lost a close state Senate race. While she was hired as a budget analyst for the GOP Senate caucus, her voice has been lost to Republicans who now seem to stand unified, at least in committee, against full legalization.
“I can’t say, because we haven’t caucused it,” said Themis Klarides, of Derby, the House minority leader, when asked what her members feel about the legislative package. “I haven’t heard anybody talk to me about supporting it.”
But judging by the emergence of a second generation of marijuana investors who have purchased two growing operations as well as dispensaries, the state is seen as as potential growth industry leaning toward full legalization for adults.
Over the last year, Connecticut Pharmaceutical Solutions, of Portland, and Advanced Grow Labs, of West Haven, have been acquired by out-of-state companies that specialize in the nation’s emerging cannabis industry.
“Connecticut has a very successful medical marijuana program, so it’s not surprising that people want to invest and be part of that program,” said Department of Consumer Protection Commissioner Michelle Seagull, whose agency administers the medical cannabis program.
Seagull who as the agency attorney seven years ago drafted many of the medical cannabis regulations, said that her staff is evaluating the pending legislation, which would include new duties for the department through a cannabis control commission similar to the current Liquor Control Commission.
“We’re giving thought to running a new adult-use program as successful as the medical program,” she said.
Company partnered with Willie Nelson
Advance Grow Labs was purchased in February by Green Thumb Industries, of Chicago, for about $80 million. Last year, Connecticut Pharmaceutical Solutions was bought by Tautara Capital, of Manhattan, a private equity firm that has not disclosed the price. Its website describes itself as “dedicated to helping great companies realize their vision in the burgeoning cannabis industry.”
One of the Tautara’s clients is outlaw-country music legend Willie Nelson, a longtime proponent of marijuana consumption. The company helped him raise $12 million last year to launch his own cannabis brand.
Ethan Ruby, president of Theraplant, in Watertown, one of the original producer licensees, said that the turnover of Advanced Grow Labs and CPS is typical of the growth that the marijuana industry, both medical and recreational, is experiencing throughout the country The big money speaks to the legitimacy of cannabis being here to stay,” said Ruby, 53, a former star collegiate baseball player who became a paraplegic in 2000 when he was struck by a car that ran a red light in New York City, then found that marijuana helped him cope with pain. “Multi-state organizations have started on buying sprees across the country.”
Ruby said Connecticut’s medical program has been “a tremendous success” because of its strict regulations and first-in-thenation testing requirements for potency and purity, which resulted in more and more doctors — 1,098 as of Friday — joining to show the drug’s acceptance as a viable therapy.
Win or lose this year, the package of legislation indicates that sooner or later, retail sales are likely to be approved.
“It’s not surprising, but encouraging that businesses are preparing themselves for this opportunity to bring new economic development and jobs to Connecticut and generate needed revenue for the state budget,” said Adam Wood, spokesman for the Marijuana Policy Project/ CT Coalition to Regulate Marijuana. “When legalization moves forward, all of these new businesses in Connecticut will have a license, pay substantial taxes and have to comply with strict rules regarding who to sell to and how to sell.”
Wood, who was chief of staff for former Bridgeport Mayor Bill Finch, admitted that it may take time for the momentum of retail sales for adults to reach Connecticut.
“While there is no guarantee that legalization will happen this year, one thing is certain — that prohibition is a failed policy with no consumer safeguards and no equity,” Wood said. “It is a better public policy for businesses to be regulated, to generate revenue for the state and to have provisions in place for public health and public safety.”