§ 21a-420l — Authorization for expanded activity of producer. Social equity partnership.

(a) In addition to activity permitted under chapter 420f, a producer may sell, deliver, transfer, transport, manufacture or package cannabis utilizing a transporter or the producer's own employees, to cannabis establishments, upon authorization for such expanded activity in writing by the commissioner, provided a producer may not transport any cannabis to consumers, patients or caregivers directly or through a delivery service. (b) To obtain approval from the commissioner to engage in expanded activity as described in subsection (a) of this section, a producer shall submit (1) a complete license expansion application on a form prescribed by the commissioner, (2) a medical cannabis preservation plan, to ensure against supply shortages of medical marijuana products, which shall be approved or denied at the commissioner's discretion, (3) payment of a conversion fee of three million dollars, provided, if the producer participates in at least two approved equity joint ventures as described in section 21a-420m , such fee shall be one million five hundred thousand dollars, (4) a workforce development plan in accordance with requirements developed by the Social Equity Council, that has been reviewed and approved by the Social Equity Council in accordance with section 21a-420d , and (5) (A) a contribution of five hundred thousand dollars to the Social Equity Council for the program established by the council in accordance with subsection (l) of section 21a-420d , or (B) evidence of an agreement with a social equity partner pursuant to subsection (c) of this section. (c) Any producer seeking to obtain approval under subsection (b) of this section may enter into an agreement with a social equity partner to provide such partner five per cent of the grow space associated with the expanded activity of the producer, to establish a social equity business. The producer shall provide to the social equity partner, for a period of not less than five years, mentorship and all overhead costs that are necessary to ensure success, as determined by the Social Equity Council and codified in an agreement between the social equity partner and producer. The producer shall ensure that the social equity partner complies with the cannabis cultivation, testing, labeling, tracking, reporting and manufacturing provisions of RERACA as they apply to cultivators. The social equity partner shall own, and be entitled to, one hundred per cent of the profits of the social equity business established under this subsection. The Social Equity Council may require evidence of a social equity partnership that includes, but need not be limited to, evidence of business formation, ownership allocation, terms of ownership and financing and proof of social equity applicant involvement. The producer or social equity partner shall submit to the Social Equity Council information including, but not limited to, the organizing documents of the entity that outline the ownership stake of each backer, initial backer investment and payout information to enable the council to determine the terms of ownership. Prior to submitting the agreement to the department, the social equity partner and business agreement shall be approved by the Social Equity Council. (d) For purposes of this section, “social equity partner” means a person that is controlled, and at least sixty-five per cent owned, by an individual or individuals, or such applicant is an individual, who: (1) Had an average household income of less than three hundred per cent of the state median household income over the three tax years immediately preceding such individual's application; and (2) (A) Was a resident of a disproportionately impacted area for not less than five of the ten years immediately preceding the date of such application; or (B) Was a resident of a disproportionately impacted area for not less than nine years prior to attaining the age of eighteen.

Legislative History

(June Sp. Sess. P.A. 21-1, S. 26; P.A. 23-79, S. 27.) History: June Sp. Sess. P.A. 21-1 effective July 1, 2021; P.A. 23-79 made a conforming change in Subsec. (d), effective July 1, 2023.