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28 HARTFORDBUSINESS.COM | SEPTEMBER 20, 2021 Special Report: CT's emerging cannabis industry By Sean Teehan steehan@hartfordbusiness.com B ob Lickwar sees recreational cannabis legalization as an opportunity to significantly expand his firm's business in Connecticut, even though UHY Advisors doesn't manufacture or sell the plant. UHY, an accounting and consulting firm that serves a wide range of sectors, is aggressively seeking clients in the state's nascent cannabis industry, Lickwar said. The move makes sense, he added, because starting a legal marijuana business involves scaling a number of regulatory hurdles while figuring out complicated state and federal tax questions, in addition to dealing with capital raising, municipal land use and myriad other issues. "I see [cannabis] becoming a very big practice area here in Connecticut, no question about it," said Lickwar, whose Michigan-based firm has an office in Farmington. "The reality is people need the tax work, there's compliance work that needs to be done." Companies that want to grow and sell cannabis in Connecticut's newly legal recreational market are already jockeying for positions in what will almost certainly be a lucrative statewide industry. But those businesses will all require ancillary services from accountants and lawyers to contractors and consultants. Similar to how merchants made a fortune selling shovels during the California gold rush in the mid- 1800s, myriad service providers see Connecticut's recreational marijuana industry as a way to generate new revenues without directly being involved in the industry. "The companies within industries that decide to embrace this very safe, very lucrative, highly-regulated industry first will maximize the most profit and retain the most market share," said Ezra Parzybok, a principal at Massachusetts-based cannabis business consulting firm Blue Skies Unlimited. Growing practice Lickwar, a partner at UHY's Farmington office, stands on firm ground in predicting Connecticut's cannabis industry could be a boon for his firm. UHY's Michigan office began leaning into the cannabis industry in 2017, putting it at the forefront of sector-related issues by the time that state legalized recreational marijuana two years later. UHY's Michigan office currently serves north of 50 cannabis industry clients and has 10 staffers working solely on marijuana business, Lickwar said, adding he thinks the firm's Farmington office could post similar numbers in Connecticut. "I think it's a great opportunity for us here in the Connecticut market because we have developed expertise through our Michigan office," Lickwar said. "What's going to distinguish us is our ability to provide services even before the business is up and running." That could include anything from setting budgets and deciding whether to establish a company as an LLC or corporation, to separating certain parts of the business for tax purposes, Lickwar said. Parzybok said he's seen companies in varying industries benefit from legalization in Massachusetts. Realtors, for example, have done well selling industrial properties to companies starting grow operations. Some have even enjoyed the phenomenon known as the "marijuana markup," where warehouses are selling at higher prices due to increased demand, Parzybok said. For example, Mao Moon LLC, Diversification Play Range of industries, from law to construction firms, see new business opportunities in CT's recreational marijuana market Bob Lickwar Michael Fritz and Sarah Westby lead Hartford law firm Shipman & Goodwin's cannabis group, which sees growth opportunities in the years ahead.