Flood of retail applicants could affect pot prices
Connecticut will likely see a flood of applicants interested in selling adult-use recreational marijuana, and the number of available licenses could affect the price of the product, a presenter told a state board Tuesday.
In Washington, officials did not allocate enough time between licensing producers and licensing retailers, which led to an initial cannabis shortage followed by an oversaturated market, Rick Garza, director of Washington State Liquor and Cannabis Board, told Connecticut’s Social Equity Council.
Washington legalized recreational marijuana in 2012.
“I don’t know what the pool is or the number of producer licenses or retail licenses you plan to make available, but it’s very likely … that there will be many, many more applications than you’ll expect,” Garza told council members during a presentation.
The Social Equity Council is charged with ensuring the adultuse program is equitable and that funds from the program “are brought back to the communities hit hardest by the ‘war on drugs,’” according to the state’s website.
Washington left six months between production and the opening of retail stores, Garza said. Initially, when the shops opened, eager consumers bought up the available supply.
This drove prices up to $30 a gram at one point. Then, when production caught up, there was more supply than demand. Prices dropped to less than the cost on the illicit market, he added.
“We had overwhelmed the illicit market,” he said.
Melissa McCaw, secretary of the Office of Budget and Policy Management and an ex-officio member of the council, asked if a process of phasing in more applicants more slowly may have helped. She said Connecticut is considering such a procedure.
Garza said that could help the process in Connecticut, which is expecting “a significant volume on the application front,” according to a note on the meeting agenda.
Washington expected about 100 applications. The state received 2,858, Garza said.
Garza also emphasized a need for grants for technical assistance for applicants. Without that help, wealthier applicants have an added advantage because they can hire attorneys to guide them through the process, he said.
McCaw reemphasized the importance of the assistance, particularly for disadvantaged communities.
“We want them to be on the starting line, ready to go,” she said.
Two Hartford residents who said they planned to apply for licenses and thought they’d qualify as social equity applicants, asked when the applications would be open.
George Sutherland, one of the men who spoke during the public comment session, said he had a business plan, financing, potential locations and possible partnerships in place already.
Half of all licenses awarded through a lottery process will be “social equity applicants,” which will be determined by income and whether the applicant was a resident of a disproportionately impacted area.
The council is setting guidelines for what documentation applicants will need to verify qualifications.
While it’s not certain when applications will be open, Andrea Comer, the council’s interim deputy commissioner, said she’s hopeful the council will decide on guidelines next month.
Then, once the Department of Consumer Protection sets the number of applicants, a 30-day window will open, she said.
Social equity applications will open within that window, as will applications for businesses with medical licenses that want to apply for hybrid licenses that allow them to also sell recreational products, Comer said.