Connecticut statutes include favorable conditions for social equity applicants. The following are some of the advantages offered to social equity applicants: (1) expedited or priority licensing; (2) 50 percent of all licenses will be awarded to social equity applicants; (3) reduced licensing fees for the first three renewal cycles; and (4) tax credits for certain investments in social equity businesses.
A social equity applicant, according to Connecticut’s Responsible and Equitable Regulation of Adult-Use Cannabis Act (RERACA), is one that is at least 65 percent owned and controlled by an individual or individuals who (1) had an average household income of less than 300 percent of the state median household income in the three tax years immediately preceding the date of the application and (2) lived in a disproportionately impacted area for at least five of those years or was a resident of a disproportionately impacted area for not less than nine years prior to attaining the age of 18.
In Connecticut, for example, the median household income in 2019 was $78,444. As a result, if the calculation just needs the use of the 2019 median income, the individual’s income over the last three years must average less than $235,332, in order to be considered a social equity applicant.
The Social Equity Council, comprised of 15 members, was established by RERACA with the goal of promoting and supporting full participation in the cannabis sector by people from communities that have been disproportionately disadvantaged by cannabis prohibition and enforcement, among other things.
The Social Equity Council looked at past drug offenses and current unemployment statistics in Connecticut when assessing which communities were disproportionately impacted. The Connecticut Social Equity Council has identified census tracts that are disproportionately impacted, which can be viewed on their website. To be eligible, a person must have resided in one of these impacted locations for at least nine years before to reaching 18 years old, or for five out of the last ten years.
A business shall be regarded a social equity applicant if an individual or individuals fits the criteria above and owns and controls at least 65 percent of the applicant’s business.
The social equity joint venture is perhaps one of RERACA’s most innovative and social justice-oriented policies, designed to help level the playing field for social equity applicants (SEJV). The SEJV is intended to incentivize existing medical cannabis companies to partner with social equity applicants in exchange for a 50 percent reduction in the price for converting from a primarily medical cannabis company to a hybrid retailer (selling both medical and adult-use cannabis).
To be eligible for this program, a medicinal cannabis company must form a SEJV in which the social equity applicant owns at least 50% of the company.
A medical cannabis company can also request to increase its activities (e.g., from simply retail to retail plus cultivation) and have its fee cut by half if it participates in two SEJVs, among other things.
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