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12 n e w h a v e n B I Z | S e p t e m b e r 2 0 2 1 | n e w h a v e n b i z . c o m February predicted $250 million in adult-use sales in year one, and $750 million by year seven. While Connecticut's medical marijuana market is dominat- ed by large corporate multistate operators, adult-use legisla- tion was designed to give some preference to smaller players, especially those who qualify as social equity candidates. As behemoths operating in the medical cannabis market expand into the recreational industry, and independent entrepreneurs try to get a foothold in the sector, some are concerned that large corporations will swamp smaller com- petitors, while others say there's plenty of room for everyone. Regardless, numerous in-state and out-of-state operators are developing plans to enter the market. "Don't be surprised if lots of [multistate operators] come into Connecticut because that's their business; but that doesn't mean little operators can't succeed," said Ben Zachs, chief operating officer of Fine Fettle, which owns medical marijuana dispensaries in Newington, Storrs and Williman- tic. "I think there's a real opportunity [for entrepreneurs]." Local opportunities Fine Fettle is a relatively small multistate operator that's rooted in Connecticut. It's headquartered in Hartford and operates three local dispensaries. But it also runs two culti- vation facilities and two dispensaries — all of which serve the medical and adult-use market — in Massachusetts, and a cultivation site in Rhode Island, where only medical cannabis is currently legal. Zachs said Fine Fettle will apply for a "hybrid" license in Connecticut that would allow it to sell to adult-use cus- tomers, in addition to medical patients. Last month, Fine Fettle's Newington dispensary became the first cannabis business in Connecticut to receive preliminary municipal approval for an adult-use outlet. Aer operating in the industry since 2019, Zachs said he can see some disadvantages local entrepreneurs will face entering Connecticut's recreational market that will likely include large, established corporate players like Chicago-based Green umb Industries and Massachu- setts-based Curaleaf; but he also sees other areas where locals could have an upper hand. Setting up a cultivation facility, for example, would be a steep hill to climb without corporate backing because it's an expensive proposition that requires a large grow facility and equipment that cost millions of dollars, Zachs said. On the other hand, entrepreneurs looking to make edibles only need a kitchen and materials, and operators with less overhead costs can serve a smaller market share, make a healthy profit and possibly expand later. "ere's a real opportunity for people to make niche products," Zachs said. "If you make a product people love, you can be successful." Additionally, Zachs said, local entrepreneurs may be more in tune with municipal boards that will ultimately de- termine whether or not marijuana companies can operate within their borders. Big ambitions Tim Hawkins, vice president of retail field operations at Green umb Industries, agrees that independent entrepreneurs will face headwinds entering the recreational cannabis market. His company, which operates in 13 states and employs about 2,200 people, according to Cannabiz Intelligence, is interested in acting as a resource for smaller players as it looks to expand in Connecticut. Green umb owns and operates three medical dispensaries in Connecticut, in addition to West Haven- based Advanced Grow Labs, one of four legal cannabis cultivators currently operating in the state. Green umb plans to apply for a hybrid license so it can serve both the medical and recreational markets, Hawkins said. In addition, the company is looking to open a new and larger production facility in Stratford that would replace its current West Haven home. About 75 people currently work at Advanced Grow Labs, and Hawkins predicts the company would add about 50 additional workers to operate the larger facility. He said Green umb wants to start construction by the second quarter of 2022. Hawkins said Green umb established an incubator program in Illinois for smaller cannabis entrepreneurs. It doesn't have a physical space, but offers an office- hours setup where company officials meet with small In-state and out-of-state companies, big and small, are preparing to enter CT's recreational marijuana industry By Sean Teehan Green Rush Luis Vega, owner of hemp farm and vendor Wepa! Farms, wants to expand his business to grow and sell cannabis in Connecticut's recreational market. Ben Zachs S ince 2016, Luis Vega has run North Haven-based hemp company Wepa! Farms, but now he's looking to expand into Connecticut's newly-legalized recreational cannabis market. Wepa! grows and sells hemp, and extracts legal can- nabinoids like cannabidiol (CBD) for companies that make anything from CBD edibles to topical creams. Vega is currently looking in 10 different municipalities for a 100,000- to 250,000-square-foot space to expand the compa- ny's operations, he said. If all goes according to plan, Wepa! — which has five full- time employees — will get licenses to grow and sell cannabis to the recreational market. "Ultimately we will enter the lottery for the numerous different licenses," said Vega, who noted his company's $5 million valuation stands to increase 10-fold by adding adult- use cannabis production and retail sales to the mix. "It's a big marketplace." Fewer than three months have passed since recreational marijuana use has been signed into law, and state consum- er protection officials are likely at least a year away from establishing a regulatory regime and blessing businesses to commence adult-use sales. However, many businesses are already getting their ducks in a row to enter what is likely to be a very profitable and competitive marketplace. Industry experts and state officials are projecting Con- necticut's adult-use cannabis market will start off strong and grow significantly. Trade publication MJBizDaily in PHOTO | STEVE LASCHEVER

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