Hartford Business Journal

20 HARTFORDBUSINESS.COM | MARCH 20, 2023 Ginne-Rae Clay (right with microphone), is the executive director of the Social Equity Council, which helped launch a new accelerator program for cannabis startups. HBJ PHOTO | STEVE LASCHEVER Solid Foundation New accelerator program seeks to help launch social equity cannabis startups By Matthew Broderick Hartford Business Journal Contributor O n Jan. 10, recreational cannabis sales officially became legal in Connecticut. Already, consumers age 21 and older have shown there is demand for adult-use pot products. Through the end of February, recreational cannabis sales surpassed $12 million. As the marijuana industry gears up to meet that growing demand, the state's Social Equity Council has helped create a new accelerator program, which is offering technical business assistance and entrepre- neurial support to qualified social equity cannabis startups. The eight-month accelerator, funded by $1 million in state support, is being run by reSET, a Hartford-based nonprofit business accelerator program operator, and Oakland, California-based Oaksterdam University, the nation's first cannabis college. Sarah Bodley, executive director of reSET, said the program will assist 35 participants who have received provisional licenses from the state Department of Consumer Protection. Companies awarded a provisional license have 14 months to complete the neces- sary steps to earn a final license and open for business. Those steps include lining up financing, raising investment capital and finding a location — areas the accelerator, which kicked-off in mid-January, aim to address. "This program is a bit more complex because we are looking at an entirely new industry," Bodley said. She noted, for instance, there are 14 different cannabis licenses under different industry catego- ries, including cultivation, manu- facturing, sales, and delivery and transportation. "We want to make sure that each license type gets the specific infor- mation they need," Bodley said. 'Solid foundation' To ensure that participants under- stand both the business and regu- latory requirements of the cannabis industry, the accelerator will have three phases, according to Dale Sky Jones, executive chancellor of Oaksterdam University. The first phase will provide online education about the history and business of cannabis. "We want to teach (participants) about policy and advocacy so they have a solid foundation," Jones said. Since its 2017 founding, Oaksterdam has educated more than 80,000 students from 110 countries about the cannabis industry. The second phase, scheduled to launch this month, will feature a number of workshops and one-on-one coaching from industry experts, said Tamika McPhail, the accelerator's program manager. "We will explore (topics like) legal documents, business formation, stra- tegic partnerships, workforce recruit- ment and social impact," McPhail said. The accelerator also includes the involvement of the Minority Cannabis Business Association and Interna- tional Cannabis Bar Association to help provide legal expertise. A core focus of the program — and of Connecticut's Social Equity Council — is to try to address the negative impacts the war on drugs has had on certain minority groups. To ensure communities that have been disproportionately impacted by drug arrests benefit from the economics of recreational cannabis, customers must pay a 3% sales tax — on top of the state's existing 6.35% sales tax — that benefits the host community. Some have criticized Connecticut's recreational marijuana program for not doing enough to help social equity entrepreneurs, and favoring large, multistate operators that have controlled the medical cannabis market. The accelerator is one way the state is offering assistance to social equity startups. Growing opportunity As the state's cannabis industry grows, the economic impact is projected to be significant. According to a 2020 study by UConn's Connecticut Center for Economic Analysis, recreational cannabis sales could add between $188 million to $223 million to the state's coffers by year five, while direct local tax revenue is projected to be $71 million over the first five years. Part of that money will go to the social equity and innovation fund, which will provide access to business capital and technical assistance for cannabis startups. The state has also authorized up to $50 million in general obliga- tion bonds for the Department of Dale Sky Jones Sarah Bodley Week ending JAN 14 JAN 21 JAN 28 JAN 31 FEB 4 FEB 11 FEB 18 FEB 25 FEB 28 Adult-use retail sales $1,485,019 $1,487,815 $1,553,216 $578,840 $1,047,436 $1,671,205 $1,742,486 $1,862,822 $700,300 500K 1M 1.5M 2M Recreational cannabis retail sales in CT $12.1 M TOTAL

• Cover