§ 21a-420m — Creation of equity joint ventures by producer. Requirements. Limitations. Fees.

Connecticut § 21a-420m

• Jurisdiction: Connecticut
• Title 21a: Consumer Protection
• Ch. 420h: Regulation of Adult-Use Cannabis

Text

(a) In order to pay a reduced license expansion authorization fee as described in subsection (b) of section 21a-420 l, a producer shall commit to create two equity joint ventures to be approved by the Social Equity Council under section 21a-420d and licensed by the department under this section. (b) The equity joint venture shall be in any cannabis establishment licensed business, other than a cultivator license, provided such equity joint venture is at least fifty per cent owned and controlled by an individual or individuals who meet, or the equity joint venture applicant is an individual who meets, the criteria established in subparagraphs (A) and (B) of subdivision (51) of section 21a-420 . (c) The equity joint venture applicant shall submit an application to the Social Equity Council that may include, but need not be limited to, evidence of business formation, ownership allocation, terms of ownership and financing and proof of social equity status. The equity joint venture applicant 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. (d) Upon obtaining the written approval of the Social Equity Council for an equity joint venture, the equity joint venture applicant shall apply for a license from the department in the same form as required by all other licensees of the same license type, except that such application shall not be subject to the lottery. (e) A producer, including the backer of such producer, shall not increase its ownership in an equity joint venture in excess of fifty per cent during the seven-year period after a license is issued by the department under this section. (f) Equity joint ventures that are retailers or hybrid retailers that share a common producer backer or owner shall not be located within twenty miles of each other. (g) If a producer has paid a reduced conversion fee, as described in subsection (b) of section 21a-420 l , and subsequently did not create two equity joint ventures under this section that, not later than fourteen months after the Department of Consumer Protection approved the producer's license expansion application under section 21a-420 l , each received a final license from the department, the producer shall be liable for the full conversion fee of three million dollars established in section 21a-420 l minus such paid reduced conversion fee. (h) No producer that receives license expansion authorization under section 21a-420 l shall create more than two equity joint ventures. No such producer shall apply for, or create, any additional equity joint venture if, on July 1, 2021, such producer has created at least two equity joint ventures that have each received a provisional license. (i) An equity joint venture applicant shall pay fifty per cent of the amount of any applicable fee specified in subsection (c) of section 21a-420e for the first three renewal cycles of the applicable cannabis establishment license applied for, and shall pay the full amount of such fee thereafter.

Legislative History

(June Sp. Sess. P.A. 21-1, S. 27; P.A. 22-103, S. 6; P.A. 23-79, S. 28; P.A. 24-76, S. 12.) History: June Sp. Sess. P.A. 21-1 effective July 1, 2021; P.A. 22-103 amended Subsec. (b) by adding provision re equity joint venture be at least 50 per cent owned or controlled by individual or individuals who meet, or equity joint venture applicant be individual who meets, criteria established in Sec. 21a-420(48)(A) and (B), Subsecs. (c) and (d) by substituting references to equity joint venture applicant for references to producer and social equity applicant and Subsec. (g) by adding provisions re 14 month period for receipt of final license and deduction for paid reduced conversion fee, added Subsec. (h) limiting number of equity joint ventures and Subsec. (i) re reduced fees, and made technical and conforming changes, effective May 24, 2022; P.A. 23-79 substantially amended Subsec. (f) re proximity of equity joint ventures that are retailers or hybrid retailers, and made technical and conforming changes in Subsecs. (b) and (f), effective July 1, 2023; (Revisor's note: In 2024, a reference to “the effective date of this section” in Subsec. (h) was changed editorially by the Revisors to “July 1, 2021” for accuracy); P.A. 24-76 made a conforming change in Subsec. (b), effective July 1, 2024.