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Applying for a License

Resources for Aspiring Cannabis Entrepreneurs

Introduction to the License Lottery

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. Connecticut will be offering legal licenses to businesses that want to grown, distribute, transport, and sell cannabis.

 

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. The SEC will verify that any Social Equity Applicant meets the established criteria. DCP has contracted with the University of Connecticut (UConn) to conduct the lottery. The DCP has released dates for the opening of lottery rounds for various retail cannabis licenses, displayed below. After the lottery opens, applicants have 90 days to submit an application to the council.

License Lottery Calendar.png

License Lottery Key Links

The links below will direct you to various pages of the Connecticut government website that hosts the e-license application portal, an overview of the documents required for an application, and a presentation that will walk you through to application process:

E-License Portal

Application Information

Process Guide

License Lottery FAQs

Am I eligible to be a Social Equity Entrepreneur?

To be eligible for a social equity license, you need to live in a “Disproportionately Impacted Area” (DIA), have lived in a DIA five of the last 10 years, or have lived in a DIA for at least 9 of the first 18 years of your life.  Additionally, your household income must be less than 300 percent of the median household income in the state, less than $235,332 in Connecticut during 2021. 

Where are DIAs located?

Disproportionately impacted areas in CT shown below in blue. This list of disproportionately impacted areas was approved by the Social Equity Council on August 5, 2021. Search an address to see if it falls within a disproportionately impacted area. For more information on how the DIAs were identified, visit the State of Connecticut Website.

Where do I get an application to become a Social Equity licensee?

License applications will be available on February 3, 2022.  We recommend that on or after February 3, entrepreneurs interested in participating in the Social Equity License Lottery visit the e-License Portal. The press release can be found here.

What is the Social Equity Lottery?

The Social Equity Lottery is a lottery conducted by the Department of Consumer Protection (DCP) and University of Connecticut (UConn) and will decide which applicants will be provided a “provisional” license to operate a cannabis business. The SEC will verify that any Social Equity Applicant meets the established criteria.

What types of businesses will be required to have a Social Equity License?

  • Retail Stores (retailers who only sell recreational cannabis)

  • Hybrid Retailers (Retailers who sell medical and recreational cannabis)

  • Cultivators and Micro-Cultivators (growers with less than 5,000 square feet of grow space)

  • Delivery Services (businesses that deliver cannabis to homes)

  • Food and Beverage Manufacturers (businesses who infuse cannabis into edible products)

  • Product Manufacturers

  • Product Packagers (businesses who take raw cannabis and package it into products)

  • Transporters (businesses that transport cannabis from manufacturers, cultivators, and packagers to retailers and hybrid retailers)

How many Social Equity licenses will be granted?

In the first round of the lottery, there will be 6 SE retailer licenses, 2 SE micro-cultivator licenses, 5 SE delivery service licenses, 2 SE hybrid retailers, 5 SE food and beverage licenses, 3 SE product packager licenses, 3 SE product manufacturer licenses, and 2 SE transporter licenses.

How many non-SE licenses will be granted in the first round?

The same number of non-SE licenses will be granted as the number of SE licenses in each category except for cultivators.

What is a SE Joint Venture or a SE Partner?

An “equity joint venture” is defined as a licensed business (other than a cultivator) where the SE applicant owns at least 50 percent of the venture.

What is the advantage of being an “Equity Joint Venture”?

Equity Joint Ventures are NOT subject to the lottery.  And, Equity Joint Ventures have lower licensing fees than non-SE cannabis licensed businesses.

How much do cannabis licenses cost?

The cost of cannabis business licenses depend on the type of business and whether the business is a social equity or non-social equity business. For example, a license fee for a non-social equity retailer is $500 to participate in the lottery and $5,000 to receive a provisional license and $25,000 to receive the final license. For social equity retailers, those fees are $250, $2,500 and $12,500. For a delivery service, the SE lottery application is $125.00, the provisional license for the delivery service is $500.00 and the final license for the delivery service is $2,500.  For non-SE delivery services the fees are double the fees of SE delivery applicants. For a chart on all license fees visit: 

https://portal.ct.gov/cannabis/Knowledge-Base/Articles/Adult-use-cannabis-license-fees?language=en_US

What do the fees cover?

The Lottery fee is to participate in the lottery. 

The provisional license fee is paid if you win the lottery.  A provisional licensee needs to provide additional information prior to opening their business.  This includes but is not limited to providing a Workforce Development Plan, documentation supporting the truthfulness of the applicants’ application, proof that applicants are eligible to be considered SE businesses or SE joint ventures.

The License is required to start selling to the public or to other cannabis licensed businesses

Can I participate in multiple license lotteries?

Yes, you can participate in all SE license lotteries.

If I do not win a license in the lottery, do I get my money back?

No, you will not receive the lottery fee back if you do not win the lottery.  You are not required to pay for the provisional or permanent license unless you have won the lottery.

Where can I go to get trained on how to operate a cannabis business?

The SEC is in the process of establishing training programs for SE businesses. More information will be shared as additional information becomes available.

Do I have to pay state, federal and local taxes on my cannabis sales?

Yes, you will have to pay federal, state and local income taxes on your business’ income.  You will also be required to pay Social Security and Medicare taxes for your employees.  

Can I open a commercial bank account for my cannabis business?

You can open a commercial bank account with banks or credit units that are not federally chartered.  There are currently 5 institutions that can serve cannabis businesses in the state. The 3 banks and 2 credit unions are not public in their efforts, fearing reputational risk among account holders.

Do existing licensed dispensaries have incentives to partner with SE individuals to open new businesses?

Yes, existing medical dispensaries can form joint ventures where SE individuals/investors own 35 percent of the new business.  These businesses would not have to participate in the lottery and would have fees the same as SE applicants.