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The practice of exchanging cannabis or cannabis-related products for donations or other purchases — known as “gifting” — could now carry a heavy price tag Connecticut.
Under legislation signed last week by Democratic Gov. Ned Lamont, towns can fine residents up to $1,000 for gifting a cannabis plant or related products.
The state also has the authority to issue $1,000 fines for not paying state sales taxes on the exchanges.
But there’s a “huge catch” – the licensing fee is $3 million, noted Michelle Bodian, a senior associate attorney in Vicente Sederberg’s Boston and New York offices and the lead on Connecticut licensing.
“It’s a head-scratcher,” she said – and a huge barrier to entry.
The $3 million fee sticks out in a social equity program that otherwise is considered by some to be one of the best in the country in terms of promoting greater participation among minority entrepreneurs and individuals affected by the war on drugs.
Connecticut Senate Has Passed Legalizing Marijuana
At the start of the week, the Senate In Connecticut approved a piece of legislation to legalize marijuana. Now the next step of the process is sending the bill off for the last phase of voting which will be done by the House. This last approval comes just days left in the legislative session.
Those who the heads of the House have mentioned they plan to take up the legislation in that chamber before Wednesday’s end-of-session deadline Yet it will be sorted following working out matters concerning the state budget.
A bill to legalize marijuana in Connecticut that’s being backed by the governor was approved by a key committee on Tuesday—but it “remains a work in progress,” the chairman said.
The legislation, which has been amended since its introduction to include a series of new social equity provisions, advanced through the legislature’s Judiciary Committee after a 22-16 vote.
But it’s not the only legalization bill that lawmakers are considering. A competing proposal from Rep. Robyn Porter (D) was approved in the Labor and Public Employees Committee last month.
New Jersey legalized marijuana last month. Now New York state lawmakers reached a deal to legalize it as soon as next week. Will Connecticut be next?
“It would decriminalize simple cannabis possession of up to 6 ounces, but also creates really robust equity and job apprenticeship and job building programs,” Jason Ortiz, president of the Minority Cannabis Business Association, said.
Ortiz said the legislation the labor committee passed Thursday takes the best of legislation from around the region and builds on it.
Several MSOs, including Curaleaf, Green Thumb Industries and Trulieve, have spent tens of millions of dollars in the past two years to enter or expand in Connecticut’s MMJ market and position themselves for the possible legalization of recreational cannabis.
In addition, any adult-use market is expected to generate license and ancillary opportunities for a number of Connecticut-based enterprises, including social equity applicants and small businesses.
Billions of dollars in business opportunities are riding on whether New Jersey residents legalize a recreational cannabis market in November.
A recreational marijuana industry in New Jersey itself – with a population of nearly 9 million people – would reach $850 million-$950 million in sales a year by 2024, according to a Marijuana Business Daily projection.
But that’s not all: Approval is expected to cause a domino effect along the Eastern Seaboard and inland, creating an adult-use marijuana region that is among the biggest in the world.
Financial analysis firm Cantor Fitzgerald released a report on Wednesday which estimates that Arizona, New Jersey, New York, Pennsylvania and Connecticut will legalize recreational cannabis sales in the next two years.
Analyst Pablo Zuanic calculates that these new states will add $3.5 billion in market potential for cannabis MSOs and other smaller players.
Some lawmakers took a practical approach to the issue of cannabis legalization.
“No one is here advocating for the use of cannabis, that’s not what this is about,” said Representative Steve Stafstrom. This is about saying it is here. It is at our doorsteps. It’s on our streets. How should we as a state regulate that substance?”
A year ago, marijuana legalization looked like it was on a roll in the Northeast — it had already passed in three of the region’s states and was a priority for governors in three more, including the populous New York.
Now, after legislative efforts stalled and a vaping sickness stirred new concerns, the governors of New York, New Jersey and Connecticut still want to make recreational pot legal. And they and Pennsylvania's governor have been comparing notes on how to do it.