Hartford Business Journal

10 HARTFORDBUSINESS.COM | SEPTEMBER 6, 2021 Special Report: CT's emerging cannabis industry By Sean Teehan steehan@hartfordbusiness.com 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 cannabinoids 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 company'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 consumer 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 Connecticut's adult- use cannabis market will start off strong and grow significantly. Trade publication MJBizDaily in February predicted $250 million in adult-use sales in year one, and $750 million by year seven. While Connecticut's medical marijuana market is dominated by large corporate multistate operators, adult-use legislation 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 competitors, 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 Willimantic. "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 cultivation facilities and two dispensaries — all of which serve the medical and adult-use markets — 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 customers, 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. After 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 Thumb Industries and Massachusetts-based Curaleaf; Green Rush In-state and out-of-state companies, big and small, are preparing to enter CT's recreational marijuana industry HBJ PHOTO | STEVE LASCHEVER 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.

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