Last Updated: 7/2/2021
Connecticut recently became the 19th US state to legalize recreational cannabis, a market that MJBizDaily estimates will be worth more than $700 million in just a few years. It comes shortly after fellow Northeastern states New Jersey and New York legalized recreational cannabis as well. The new law has plenty of provisions to help small businesses and newcomers to get into the Connecticut market, including caps on the total number of licenses a single applicant can have and a robust social equity program that requires at least 50% of licenses go to such applicants.
There’s still a lot that still needs to be determined about the new recreational program, including the total number of licenses that will be available. But you can get ready now by educating yourself on the current law’s provisions, the current state of the cannabis market in Connecticut, and how to get into the cannabis market in general.
Can I open a dispensary in Connecticut right now? No, you need a license to open a dispensary, and they haven’t opened up for applications for recreational dispensaries yet or announced when they will. According to the official Connecticut government website for the recreational program, they’re targeting late 2022 for launch of recreational sales so you can expect them to start accepting applications at least a few months before then.
About the New Law
Key provisions of the law include:
- You can knowingly (wink wink) provide a maximum of 1 oz of cannabis to customers
- People can posses a maximum of 5 oz of cannabis if stored in their car or home or up to 1.5 oz of cannabis anywhere else
- These limits apply to cannabis plant material / flower only; they’re lower for cannabis concentrates for example, up to 25 g
- Taxes include:
- The standard 6.35% state sales tax, plus an additional tax based on the THC content of the product AND the type of product
- A 3% municipal sales tax
- Cities can ban dispensaries and other cannabis businesses, but they can’t ban delivery
- Consumption lounges aren’t allowed, but the bill sets a timeline for their potential consideration and approval by 2023
The Current Cannabis Market in Connecticut
It’s somewhat similar to nearby New Jersey, though Connecticut never had the vertical integration requirement (meaning companies had to grow, process, and sell all their own weed) that New Jersey did. Medical cannabis has been legal in Connecticut since 2012.
There are currently about 50,000 registered medical cannabis patients in the state being served by 18 dispensaries and 4 producers (the latter responsible for growing, processing, packaging, and distributing the cannabis products). These medical cannabis companies are a mix of big Multi-State Operations (MSOs) like Curaleaf, which has 1 producer license and 4 dispensaries in the state, and smaller and mid-sized companies.
The state medical cannabis agency has an interesting site that lets you view every single cannabis product produced and sold in the state, though it doesn’t provide sales numbers.
Types of Cannabis Licenses in Connecticut
|Lottery Application||Provisional License||Final License|
|Food and Beverage Manufacturer||$250||$1,000||$5,000|
Connecticut will not be offering any new medical cannabis licenses.
There are nine different types of recreational licenses that will be available. These license types are pretty self-explanatory, aside from hybrid dispensary licenses and the difference between delivery and transporter licenses.
Hybrid dispensary licenses are only available to existing medical cannabis dispensaries and allow holders to sell both medical and recreational cannabis.
Delivery licenses let you deliver cannabis to consumers, transporter licenses let you deliver it to other cannabis license holders.
Also, a micro-cultivator is defined as a cannabis cultivator with between 2,000-10,000 sq. ft. of growing space. A regular cultivator is one with at least 15,000 sq. ft. of growing space. As a micro-cultivator, you will only be able to expand your grow by 5,000 sq. ft. per year, and you will only be able to convert to a regular cultivation license once you reach 25,000 sq. ft.
How Many Total Licenses Will Be Made Available?
It’s uncertain at this time. The state cannabis commission will clarify this in its rules or request for applications at some point.
What we do know from the new law is that:
- 50% of all licenses of each type will go to social equity candidates
- Each city is restricted to no more than one dispensary and one micro-cultivator per 25,000 residents
By our calculations based on 2019 population numbers for 169 towns in Connecticut, that means that a maximum of about 200 dispensary licenses will be available.
How to Get a License
As mentioned, there are many things we still don’t know about how licenses will be distributed under the new law, especially how many total will be available of each kind, when the state will start accepting applications, and what will be required on each application. If they want to launch retail sales in late 2022, they’ll have to start accepting applications at least by Q2 or Q3 2022. Just pay close attention to the news to find out when they actually do.
Need help putting your applications together? Find a good cannabis lawyer or cannabis consultant for help.
The Overall Process
It does appear that there will be three main steps/processes to getting a license, assuming that more people apply for licenses than are available and a lottery is required:
- Submitting an application to the lottery
- Winning the lottery and receiving a provisional license
- Submitting an application and receiving a final license
It doesn’t appear the lottery will be weighted, so if your application is accepted you’ll have as much chance as anyone to receive a license.
License applications will be completed and submitted online.
Snagging a Provisional License
Based on other cannabis license applications, we’d guess that the initial application will probably ask for you info including:
- Your personal info
- Approval to submit to a background check
- Organizational chart with info on all key officers
- Financial data, including all significant sources of funding
- Business plan, including plans for:
- Site plan with blueprints / diagrams
Snagging a Final License
The new law does mention the requirements for obtaining a final (non-provisional) license that provisional license holders must complete within 14 months of receiving their provisional license, including:
- Having a contract with a provider of an electronic tracking system
- Having a location picked with proof that you have the right to operate there (ownership papers or approval from landlord)
- Proof of local zoning approval
- Social equity and workforce development plan
- Plan for security compliance
- Labor peace agreement
Aside from a License, What Else Do You Need to Open a Dispensary?
Incorporate and register as a business. Here’s how to do that in Connecticut.
Develop a business plan. This will probably be required for your application and is just a good idea generally to put together to organize your thoughts, put a plan together, and get on the same page with your business partners, if any.
Get funding. Explore your options here. Traditional banking services may be available by the time you start planning your cannabis dispensary, or there may be a cannabis-friendly institution in your area you can rely on. You can also pursue private investment, rely on your own financial reserves, or ask your friends and family. The more experience you have in the industry or in starting and running a business, and the more thorough and nuanced plans you can show to potential investors, the better your chances of getting funding.
Bring in talented people. If you don’t know much about the cannabis industry, bring in some people that do. Look for people with experience in established recreational (preferable) or medical markets.
Evaluate, pick, and lock down a location. It’s smart to start looking at this but actually renting or buying a place right now might be premature considering there’s no guarantee of getting a license.
Gauge and build community support. If you’re seriously considering a location, it may make sense to start discussions with city officials, police officials, and local business and community leaders, at the very least to get a sense of the level of community opposition you can expect. This may involve presenting your case at city meetings and answering people that may oppose your presence for various reasons.
Research and source your products. This may be tough at first as the recreational market just starts up and producers have to quickly get set up and grow, process, package, and distribute new cannabis products from scratch.
Get your store set up. We at Cure8 can help with this including by assisting with the site design and installing your POS, surveillance system, TVs, and WiFi. You’ll also need firms to help with construction, interior design, signs, graphics, websites, and more.
Promote your business. You’re ready to open your doors, now it’s time to ensure that they’re lined up outside on opening day. You have to make sure however you advertise and market your business that you have “reliable evidence that at least 90% of the advertisement’s audience is reasonably expected to be age 21 or older”. Connecticut also essentially bans SMS marketing. You can try listing on a site like Weedmaps, and maybe get some free local advertisement by getting the local news outlets to profile you since you’ll probably be something of a novelty in whatever community you’re in.
How Much Will It All Cost?
Between the application fees, real estate costs, renovations, equipment, labor, inventory, and marketing and advertising, you’re typically looking at at least $100,000 in startup costs if not more for a dispensary. So not a small amount by any means. At the same time, the cap on licenses in Connecticut should help you establish yourself and earn back your costs without having to worry about dealing with a flood of local competition as it has in free-for-all markets like Oklahoma and Ontario, Canada.
How Cure8 Can Help
We’re a cannabis IT services company. The best time to bring us in is in the planning stage, so either before or just after you’ve received your license. We can help you plan your security cameras, data drop, and POS station positioning to avoid costly renovations down the line. Then we’ll help you get all the tech equipment you need – including tablets, barcode scanners, receipt printers, security cameras, and WiFi devices – and get you set up, making sure tech matches the look and feel of your dispensary.
And that’s just the start of what we can do for you, so check out our main site for more info or set up a meeting with us today.