State sets criteria for social equity applicants in pot program

Connecticut has set its criteria, including documentation and workforce development plan requirements, for social equity applicants who want to open a business in the state’s emerging adult-use program.

The move marks a significant step in Connecticut’s path toward licensing businesses and opening the adult-use market to consumers.

During a meeting Tuesday in Hartford, the Social Equity Council established the criteria, which will take effect once the panel approves a plan to assist social equity applicants and if the Department of Consumer Protection agrees to an extension — from 60 days to 90 days — for the time period when applications will be accepted.

The council is charged with ensuring the adult-use program is equitable and benefits communities that have been disproportionately harmed by the war on drugs. The law stipulates that half of all licenses awarded through a lottery process will be social equity applicants.

Social equity status is determined by income and whether applicants were residents of a disproportionately impacted area.

Businesses applying must be at least 65 percent owned and controlled by someone who had a household income of less than 300 percent of the state median household income over the three years before the application and was a resident of a disproportionately impacted area for at least five of the 10 years before the application date or at least nine years when they were a child.

Rep. Geraldo Reyes Jr., a Democrat from Waterbury, praised the council on its work and read a statement of support from the Black and Puerto Rican caucus.

“We see this as one of Connecticut’s most important opportunities, and this is our one chance to get it right,” Reyes said.

The council plans to have a special meeting before its regularly scheduled January gathering to vote on the technical assistance plan, members said during the Tuesday council meeting. At the meeting, members approved income and residency requirements, ownership and control requirements, the social equity plan criteria and the workforce development plan for the program.

When the criteria is met, that triggers a 30-day window during which the Department of Consumer Protection will decide how many businesses it will license. Then the application period begins.

Council members added the criteria because, despite months of discussion, a system has not been established to provide technical support. The criteria represented a compromise between members who wanted to push ahead with beginning the application process and members who wanted to wait until technical assistance was in place.

Technical support will be important to help applicants navigate a complicated application process. Many other programs, including mentorship through the SCORE program, aren’t available to cannabis businesses because they are funded at least in part through federal dollars.

Ginne-Rae Clay, interim executive director for the Social Equity Council, said she and her staff would be able to put a plan together before the next meeting.

Member Christine Shaw said the assistance was a prominent piece of advice from other states and is important “so that we can ensure a level playing field and so that we can encourage participation by those who want to participate in this program.” Before the additional contingencies were added to the resolutions, she wanted to wait to move forward.

Others wanted to go ahead before the additions.

“I have tremendous issues with a lot of what we’re doing,” member Avery Gaddis said. “But I will tell you I’m not a fan of holding the good hostage for the perfect. … We do have to get going.”

With the additions, the council passed all sets of documentation requirements.

To prove income, applicants must have a notarized proof of income letter plus one supporting document. Supporting documents typically need to span three years and can include pay stubs, tax returns, W-2 forms, or a social security proof of income letter, among other documents.

For residency, applicants need a Connecticut driver’s license or identification card and a social security card.

They’ll also need an additional form that can include a signed and notarized lease agreement, school records or a residential property deed, among other documents.

In order to prove that at least 65 percent of the business is owned and controlled by someone who qualifies as a social equity applicant, candidates will have to submit documentation from a list of about 30 documents, including an organizational chart, personal federal tax returns and a complete list of owners.

They will also need to write a statement of purpose, goals and details on how they will achieve those goals as part of their social equity plan.

And all adult-use businesses will need to submit workforce development plans that answer six key questions about how they’ll recruit, who they plan to hire and how they’ll hire from populations targeted by the social equity council.

The council plans to host educational events about the process and distribute materials that simplify and explain the list of documentation.

“I think the process that we are creating feels onerous,” member Subira Gordon said. “… I think there’s a simpler way to do this, specifically for the smaller licenses or the smaller businesses that are going to be operating in this process.”

For business people such as Luis Vega, having the list of documentation helps get the process started. It’s much easier to talk to people — investors, or even friends — about what he wants to do now that these measures are approved and the application window is set to start soon, he said.

“I was really hoping that the time clock would get started,” Vega said.

He hopes to soon expand his hemp farm, Wepa! Farms, to include adult-use cannabis products.

During the public comment portion, others in attendance at the meeting, including patients, decried what they said were heavy licensing fees for social equity applicants, asked for more patient representation in decisions and pushed for increased quality control, citing reports of higher levels of total mold and yeast allowed in some of Connecticut’s medical marijuana supply.