Hartford Business Journal

HARTFORDBUSINESS.COM | October 10, 2022 27 HBJ Special Report Gisele Tyler, a Wilton small business owner pursuing several cannabis licenses in the state, speaks during Hartford Business Journal's cannabis expo in September. HBJ PHOTO | STEVE LASCHEVER Stacking The Odds Some of CT's recreational marijuana business lottery winners submitted thousands of applications, raising fairness questions By Skyler Frazer sfrazer@hartfordbusiness.com M aryland resident Jusmin Patel, operator of Jananii LLC, was fortunate to win the state's recreational marijuana cannabis license lottery twice, setting the stage for her company to potentially open both a dispensary and micro-cultivator business in what's expected to be a lucrative new market. But despite the lottery being a game of chance, Jananii LLC's wins weren't totally by luck. Patel's company submitted more than 2,300 license applications in the state's lottery process, paying thousands of dollars in fees for better odds of winning. The bet paid off. And Jananii LLC wasn't the only company to submit a significant number of lottery applications. Seven compa- nies submitted more than 1,000 applications each in various lottery categories, and more than half won at least once, according to a Hartford Business Journal analysis of unofficial lottery application data obtained from Connecticut's online licensing database. Seventy companies each submitted at least 100 different lottery applications. The flood of applications — over 37,000 total for just 56 licenses — has angered some social equity advocates who say Connecticut's adult-use cannabis law isn't living up to its promise of benefiting poorer communities hit hardest by the nation's decades-long war on drugs. In particular, they're frustrated that the law didn't limit the number of lottery applications that could be submitted by companies, giving individuals with deep pockets — or deep-pocketed investors — a major advantage in winning a small pool of licenses for everything from dispen- saries and grow facilities to food and beverage manufacturers and delivery companies. At least one influential lawmaker said the state legislature will consider changes to the recreational mari- juana law, including possibly capping the number of applications one entity could submit based on whether or not they're supported by a large, multistate operator. It's a change some social equity advocates are pushing for. "I submitted 10 applications because that's really all that I could afford, but I quickly saw that it was going to become a pay-to-play scheme because there were no stop- gaps built into the legislation," said Wilton small business owner Gisele Tyler, a social equity applicant pursuing several licenses in order to enter the cannabis industry. Many applications, few licenses In August and September, the Department of Consumer Protection named retailers and micro-cultivators selected via lottery to move forward with the licensing process. The state has two separate lotteries for social equity and general applicants, across eight licensing categories ranging from retailers and growers to delivery service companies and product packagers. All applications not selected in the social equity lottery are auto- matically entered into the general applicants pool. In total, just 56 licenses will be doled out in this first lottery round, but the state has said there will be more lotteries in the future. (Not all cannabis licenses are subject to the lotteries: dispropor- tionately impacted area cultivators had a one-time window to submit applications for a grower license, and existing medical producers and retailers can enter into equity joint ventures with social equity applicants without entering the lottery pool.)

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