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Connecticut Bill 1201

Responsible and Equitable Regulation of Adult-Use Cannabis Act

Connecticut Legalizes Adult-Use Cannabis

Connecticut Bill 1201, the “Responsible and Equitable Regulation of Adult-Use Cannabis Act” or “RERACA” made Connecticut the 18th state to legalize adult recreational use of cannabis.  As of July 1, 2021, individuals can possess up to 1.5 ounces of cannabis and up to 5 ounces of cannabis in a locked container in a home or the trunk or locked glove box in a person’s vehicle. 

The law will be managed by the Department of Consumer Protection (DCP).  DCP is responsible for establishing the rules for the lottery of licenses, approving licenses to participate in the industry, defining social equity entrepreneurs, social equity joint ventures, and reviewing all documents submitted by licensees to assure compliance with RERACA. 

Summary of Connecticut Cannabis Law

Public Act 21-1 is a comprehensive framework for the legalization, cultivation, sale, possession, use, and taxation of cannabis that prioritizes public health, public safety, and social justice. This summary contains the key provisions of the bill but does not aim to capture every section. Click on any section below to get started:

Equity Framework

Updates to Medical Marijuana Statutes

Prevention of Consumption by Minors

Criminal Justice and Civil Rights

Municipal Role and Authorities

Highway Safety

Licensing and Marketing

Indoor Clean Air Act and Public Consumption

Taxes and Revenues

Product Safety and Public Health

Drug Testing and Employment

 

Equity Framework

  • The bill creates an independent Social Equity Council to manage the aspects of the bill's equity program, appointed by legislative leadership, the Governor, and the Treasurer. The Council will be, for administrative purposes only, housed within the Department of Economic and Community Development.

  • Equity efforts in the bill are targeted at disproportionately impacted areas, defined as those with a high historic of convictions for drug crimes or a current high unemployment rate. Each year, the Council will certify a map delineating these areas.

  • The Council will create programs for incubating cannabis businesses, training an equitable cannabis workforce.

  • A new Equity Fund will hold much of the cannabis revenue. The Council will annually construct a budget for the fund, through constitutional order, to address access to capital, technical assistance, workforce training, and community reinvestment in disproportionately impacted areas. These investments will be targeted at people who want to start a business in any industry, not just the cannabis industry.

  • Social equity applicants, defined as businesses owned 65% or more by those who live or grew up in a disproportionately impacted area, will have priority for cannabis business licenses.

  • Ownership analysis will be performed by the Council after a business has applied for a cannabis license.

  • The Council will conduct a social equity study to evaluate the approach in the bill and determine any further steps that would promote equity. The Council will make recommendations to the General Assembly and the Governor before the next legislative session based on the conclusions of this study.

  • The Council will create a cannabis business accelerator program to partner social equity applicants who want to enter the business with existing establishments for mentorship purposes.

  • The Council will create a cannabis workforce training program to help people in disproportionately affected communities get access to cannabis employment and to ensure a pool of available employees for cannabis businesses.

  • Equity efforts are threaded throughout the other sections of the bill, in provisions regarding criminal justice and civil rights, licensing, medical marijuana, public consumption, drug testing and employment, and the use of revenues from legalization.

 

Criminal Justice and Civil Rights

  • Effective January 1, 2022, possession of up to 1.5 oz of cannabis is permitted for those age 21 and above. Possession of between 1.5 oz to 5 oz is only punishable by fines, while possession above 5 oz is a class C misdemeanor on a second offense. For people under 18, the first offense below 5 oz is a written warning, the second a referral to a juvenile review board, and the third a delinquency offense. For people in the 18-20 range, below 5 oz is a fine which can be waived on a first offense or replaced with community service on a second offense.

  • Individuals with drug possession convictions under 21a-279(c) between January 1, 2000 (start of electronic records) and October 1, 2015—mostly individuals with small amounts of cannabis—will have their convictions automatically erased, while those with convictions before or after those dates, and those with convictions for cannabis paraphernalia or sale of less than 8 ounces of cannabis, will need to file a petition with the courts to have their convictions erased.

  • Cannabis products can only be sold to consumers by licensed cannabis retailers, though consumers may gift cannabis products to one another.

  • Individuals who work in the cannabis industry or use cannabis legally are protected from being denied occupational licenses. Cannabis cannot be barred as a condition of bail, parole, or probation, with certain exceptions. The odor of cannabis cannot be used as probable cause for a vehicle search, although it may still be used as a basis for conducting a field sobriety test. Schools must treat cannabis similarly to alcohol in their policies. Law enforcement may not spend resources to enforce federal cannabis laws if those laws are the sole reason that an individual would face adverse action.

  • Effective July 1, 2023, home grow of up to three mature and three immature plants, up to twelve total plants per household, is legal. Penalties for unauthorized home grow are significantly reduced in the interim (between January 1, 2022 and July 1, 2023)—a first offense is punishable only by a written warning.

  • Penalties for illegal cannabis manufacture or sale are substantially reduced, and it is no longer a serious juvenile offense.

 

Licensing and Market

  • The primary regulator of the market will be the Department of Consumer Protection, which also regulates the alcohol and tobacco markets, as well as the gaming industry. The Social Equity Council will manage some of the equity-focused aspects of regulation.

  • All businesses participating in the cannabis industry must obtain a license from DCP to conduct cannabis activities. The bill creates nine business license types: cultivator, retailer, micro-cultivator, hybrid retailer, product manufacturer, product packager, food and beverage manufacturer, transporter, and delivery service. Micro-cultivator, food and beverage manufacturer, and delivery service licenses have lower fees and lower barriers to entry.

  • Investors ("backers") and high-level employees must also obtain individual licenses from DCP, requiring a background check. Prior drug convictions will not disqualify anyone from receiving a cannabis license; disqualifying convictions include only fraud offenses. Lower-level employees will only need to be registered with DCP.

  • DCP will collect applications periodically, and a third-party operator will prioritize them in random order for consideration for a provisional license (via a periodic lottery). Applicants whose applications are not reached in one cycle may reapply in the next cycle. Prioritization is structured to ensure that 50% of licenses will be awarded to social equity applicants. Eventually, licenses are expected to be similarly available as liquor licenses.

  • Once an applicant receives a provisional license, the applicant has 14 months to find a site, get zoning approval, submit a security plan, make a labor peace agreement, and submit a social equity plan. The applicant will then receive a final license.

  • Cultivators may grow cannabis in a facility of at least 15,000 square feet. Micro-cultivators may grow cannabis in a facility with 2,000-10,000 square feet, and they may increase beyond that cap over time or eventually convert to a cultivator license. Micro-cultivators are also allowed to sell cannabis directly to consumers; they are the only licensees allowed to do both.

  • Retailers may sell cannabis to the adult-use market only; hybrid retailers may sell both to the medical and the adult-use market.

  • Until 2025, each investor may not invest in more than two new cannabis businesses in each category of license type.

  • Cannabis businesses will be required to have a labor peace agreement with a labor organization.

  • Employees must be 18 to work in the industry, and investors and high-level employees must be 21.

  • Existing medical cannabis businesses may convert to the adult-use market as of May 2022 with payment of a substantial fee. Dispensaries will generally be required to pay $1 million, and producers will generally be required to pay $3 million.

  • Dispensaries and cultivators may optionally pay a fee reduced by half if they stand up two 65%/35% equity joint ventures with social equity applicants.

  • Producers must also either pay a $500,000 fee, earmarked for capital for new micro-cultivators, or allow a micro-cultivator to grow using a 5% portion of the cultivator's facility.

  • New social equity cultivators may freely apply during a three-month period if they locate in a disproportionately impacted area upon payment of a $3 million fee.

  • No cannabis business may be conducted across state lines, at least until the federal prohibition is lifted.

  • Cultivators may not make exclusivity or stocking priority deals with retailers.

  • DCP will adopt regs establishing maximum grow space for cultivators and micro-cultivators.

  • In order to protect access to medical marijuana for qualifying patients, the commissioner may deny a request for a dispensary to change locations.

  • No employee at DCP or the Social Equity Council may have a direct interest in the cannabis industry.

  • Cannabis businesses must maintain policies and procedures for the cultivation, processing, manufacture, security, storage, inventory and distribution of cannabis and cannabis products.

  • Cannabis establishments must use seed-to-sale tracking. Data from seed-to-sale tracking will be exempt from FOI.

  • Cannabis establishments must maintain four years of business records and make such records available to DCP upon request. DCP can conduct inspections and require audits.

  • DCP may fine or revoke a license from an establishment that provides false information to the department or the public, has insufficient controls against diversion or theft, does not keep accurate records, sells tampered products, makes underaged sales. A licensee can request a hearing upon such a fine or revocation by DCP.

  • DCP will make recommendations about home grow and on-site consumption licenses.

  • The bill gives the AG authority to prevent market concentration in the cannabis industry. Parties must notify OAG if they seek to sell, transfer, lease, exchange, option, convey, give or otherwise dispose of or transfer control over a cannabis business. Parties may be fined or ordered to comply with this section.

  • Cannabis establishments must purchase renewable electricity (i.e. wind, hydro, or solar) produced in RGGI states to the greatest extent possible.

  • DOB will make recommendations about access to depository banking and commercial mortgages by cannabis establishments.

  • CID will make recommendations about access to insurance by cannabis establishments.

  • The Governor may enter into an agreement with one or more tribes allowing them access to the state regulatory infrastructure to conduct cannabis activities.

 
 

Product Safety and Public Health

  • DCP will establish regulations regarding the following requirements:

    • Dosage, potency, and serving size limits

    • Consumer health materials to be distributed by retailers

    • Label and packaging requirements: universal symbol for cannabis, disclosure about how long it takes for cannabis to have an impact, child-resistant packaging, opaque packaging

    • Prohibited product types to ensure safety, public health, and to reduce appeal to children

    • Any other limits on products to stabilize the market and prevent shortages of medical marijuana

    • Physical and cyber security requirements

    • Brand name registration

  • Cannabis businesses must abide by certain advertising restrictions:

    • No use of toys, cartoons, or other features that would appeal to minors

    • No advertising in a medium, time, or place in which more than 10% of the audience is reasonably expected to be minors, nor within 500 feet of a school

    • No sponsorship of an event in which more than 10% of the audience is reasonably expected to be minors

    • Require that advertising have the following disclaimer: “Do not use cannabis if you are under 21 years of age. Keep cannabis out of the reach of children.”

    • No brand names that are misleading or targeted at minors

    • Further common-sense restrictions

  • Potency will be capped at 30% THC for flower and 60% THC for all other products, except pre-filled vape cartridges.

  • DCP may set different product limitations on products for adult-use cannabis than products for medical use.

  • Cannabis or paraphernalia may not be visible from a public right-of-way.

  • The Alcohol and Drug Policy Council, in consultation with various state agencies, to make recommendations about mitigating use/access of cannabis by minors, any public health risk from cannabis, and necessary data and surveillance so that the state can track the public health impact of cannabis.

  • DPH will annually administer the Youth Risk Behavior Survey, on which it may include questions relating to cannabis.

  • DPH will create an epidemiological surveillance program for any adverse events related to cannabis. The program will allow DCP, DPH, and DMHAS to share data and issue timely public health alerts.

Updates to the Medical Marijuana Statutes

  • Qualifying patients and primary caregivers may now possess 5 oz, up from 2.5 oz.

  • Qualifying patients no longer need to register with a dispensary and may purchase cannabis from any dispensary facility or hybrid retailer.

  • New conditions may be added to the medical program through guidance rather than formal regulations.

  • Adult-use businesses may participate in cannabis research through various prescribed mechanisms.

  • Testing laboratories may transact with cannabis establishments. They must be independent, and they are subject to minimum security requirements.

  • Licensed pharmacists must report transactions with qualifying patients within one hour of such transaction.

 

Municipal Role and Authorities

  • Municipalities may use their zoning code or zoning ordinances to regulate cannabis establishments, except for dispensaries or producers. If municipalities take no action, a cannabis establishment will be zoned as if it were a similar business.

  • Municipalities may prohibit or restrict the hours and signage of establishments, although new rules will not apply to existing establishments for 5 years.

  • Municipalities may reasonably restrict number and density of establishments and establishments’ proximity to schools, parks, and other places where children may gather.

  • Municipalities may not prevent delivery of cannabis products when the delivery is made pursuant to this act.

  • Upon petition of 10% of residents, a referendum can be held in a municipality at the next regular election to ban sales.

  • Municipalities may not require local benefit agreements of businesses located there.

  • Municipalities may prohibit or otherwise regulate the consumption of cannabis in any public spaces within the municipality. Municipalities may allow outdoor consumption of cannabis restaurants. Individuals may be fined up to $50 for consumption in prohibited locations. Businesses can be fined up to $1000 for a violation of this section.

  • For the first three years, municipalities may permit only one retailer and micro-cultivator per 20,000 residents; DCP may adjust that threshold afterwards.

 

Indoor Clean Air Act and Public Consumption

  • The bill updates the state’s Indoor Clean Air Act to incorporate cannabis smoking and cannabis vaping. These sections also strengthen the Indoor Clean Air Act in several ways: (1) prohibit smoking and vaping at retail establishments, places of employment, and within 25 feet of buildings; (2) prohibit smoking and vaping in hotel and motel rooms; (3) prohibit smoking and vaping in psychiatric facilities and correctional facilities. Exceptions are maintained for smoking and vaping in outdoor portions of restaurants, where permitted by municipalities.

  • Lodging establishments may not prohibit consumption of non-smoking or non-vaping cannabis in non-public areas, such as a hotel room.

  • Landlords may not discriminate against people with past cannabis possession convictions in rental housing. Landlords may not prohibit the possession or consumption via non-smoking, non-vaping means of cannabis, except in group living situations or situations where such a prohibition would be required by federal law.

  • Cannabis may not be consumed of cannabis on state lands or waters (i.e. state parks).

 

Drug Testing and Employment

  • In general, a drug test that is only positive for the long-acting metabolite of cannabis, THC-COOH, may not be interpreted as evidence of impairment.

  • Cannabis may not be the basis for denial of medical care or as the sole or primary basis for any action by DCF.

  • Institutions of higher education may only take adverse action pursuant to federal law or NCAA rules after a student tests positive for THC-COOH or possesses or uses cannabis.

  • In general, employers may only take adverse action due to current cannabis use pursuant to a written policy provided to employees in advance; employers may not take adverse action due to past cannabis use. Certain safety-critical or federally-regulated positions, and some entire employers, are exempted from these provisions.

 

Prevention of Consumption by Minors

  • The bill makes it a class A misdemeanor for an adult to give or sell cannabis to a minor.

  • Cannabis licensees may keep copies of IDs of individuals who may look underage. DCP may require cannabis licensees use an online age verification system. Use of driver’s licenses is an affirmative defense to sale to a minor.

  • The bill makes it a class A misdemeanor to induce a minor to procure cannabis, except as part of any authorized business activity, official investigation, or enforcement activity.

  • Licensees may accept driver’s licenses as proof of age and makes it an offense to use a false ID to purchase cannabis. A first offense results in a fine of up to $250, and a second offense is a class D misdemeanor. This does not apply to a minor who is taking part in a state “secret shopper” program.

  • Parents and others may not provide cannabis to their children or allow members of households who are underage from possessing or using cannabis. A violation is a class A misdemeanor. The bill updates the corresponding allowing-children-to-possess statute for alcohol to clarify the intent standard.

  • Minors may not loiter at a cannabis establishment and may not enter into a cannabis establishment unless accompanied by a parent.

 

Highway Safety

  • The bill establishes a multi-level system to train officers to recognize impaired driving. All officers will be trained to the Advanced Roadside Impaired Driving Enforcement level, and a sufficient number will be trained to the Drug Recognition Expert level to recognize impairment.

  • The bill updates the impaired driving and impaired boating statutes to move towards a behavioral impairment standard, as unlike alcohol, there is no test that determines cannabis impairment.

  • ARIDE and DRE officers will apply scientifically validated procedures to establish impairment as a basis for license suspension and DUI.

  • The bill defines new misdemeanors for an individual to consume cannabis while driving a vehicle or to smoke cannabis while a passenger in a vehicle. Violations are a class C misdemeanor while driving and a class D misdemeanor otherwise. These violations cannot be the only reason for pulling over a vehicle (e.g. there must be evidence of impairment or some other violation).

  • The state’s chief traffic prosecutor, in consultation with other agencies, will develop information about drug influence evaluations and the drug recognition expert program to be provided to the Judicial Branch.

  • DOT, DMV, and the Statewide Impaired Driving Task Force will report on enhanced data collection and the possibility of an electronic warrant pilot and oral fluid testing.

 

Taxes and Revenues

  • Three taxes will be imposed on the new cannabis market, which collectively will reach an approximate effective tax rate of 20% at the beginning of the market. First, the normal sales tax of 6.35%, a sales tax for the host municipality of 3%, and a tax charged at retail that depends on the THC content of the product.

  • Starting in FY 2024, 60% of the THC tax will go into the Social Equity Fund, and 25% will go into a new Prevention and Recovery Fund to fund public health measures. The Social Equity Fund percentage will increase to 65% in FY 2027 and 75% in FY 2029.

  • The bill repeals tax penalties and liens associated with illicit cannabis distribution. This repeal removes tax penalties that were added during the War on Drugs that have proven ineffective and expensive to enforce.

  • The bill extends an existing angel investor tax credit to 40% of cash investment in a cannabis bill, capped at $500k per investor.

  • The bill authorizes $50m in bonding for low-interest loans to equity applicants, munis, and 501(c)(3)s for renovation/development of property, capital support for equity applicants, funding for the accelerator program, and funding for the workforce training program.

  • The bill creates a joint DECD/SEC revolving loan program for social equity applicants.