2023 Connecticut General Statutes › Title 21a - Consumer Protection › Chapter 420h - Regulation of Adult-Use Cannabis › Section 21a-420g. - Review of applications by Social Equity Council. Maximum number of applications. Lottery. Rankings to be confidential. Disqualification. Provisional license. Final license.

(a) The Social Equity Council shall review the ownership information and any other information necessary to confirm that an applicant qualifies as a social equity applicant for all license type applications submitted to the department and designated by the applicant as a social equity applicant. The Social Equity Council shall prescribe the documentation necessary for applicants to submit to establish that the ownership, residency and income requirements for social equity applicants are met. On or before September 1, 2021, the Social Equity Council shall post such necessary documentation requirements on its Internet web site to inform applicants of such requirements prior to the start of the application period.
(b) Except as provided in section 21a-420o, prior to the first date that the department begins accepting applications for a license type, the department shall determine the maximum number of applications that shall be considered for such license type and post such information on its Internet web site. Fifty per cent of the maximum number of applications that shall be considered for each license type (1) shall be selected through a social equity lottery for such license type, and (2) shall be reserved by the department for social equity applicants. If, upon the close of the application period for a license type, the department receives more applications than the maximum number to be considered in total or to be reserved for social equity applicants as set forth in subsection (b) of this section, a third-party lottery operator shall conduct a lottery to identify applications for review by the department and the Social Equity Council.
(c) (1) The third-party lottery operator shall:
(A) Not be provided any application received after the close of the application period;
(B) Give equal weight to every complete application submitted during the application period; and
(C) Conduct multiple, separate geographic lotteries if required by the department.
(2) For purposes of the lottery, the third-party lottery operator shall:
(A) Conduct an independent lottery for each license type and a separate lottery for social equity applicants of each license type that results in each application being randomly ranked starting with one and continuing sequentially; and
(B) Rank all applications in each lottery numerically according to the order in which they were drawn, including those that exceed the number to be considered, and identify for the department all applications to be considered, which shall consist of the applications ranked numerically one to the maximum number set forth in accordance with subsection (b) of this section.
(d) (1) Upon receipt of an application for social equity consideration or, in the case where a social equity lottery is conducted, after such lottery applicants are selected, the department shall provide to the Social Equity Council the documentation received by the department during the application process that is required under subsection (a) of this section. No identifying information beyond what is necessary to establish social equity status shall be provided to the Social Equity Council. The Social Equity Council shall review the social equity applications to be considered as identified by the third-party lottery operator to determine whether the applicant meets the criteria for a social equity applicant. If the Social Equity Council determines that an applicant does not qualify as a social equity applicant, the application shall not be reviewed further for purposes of receiving a license designated for social equity applicants. The application shall be entered into the other lottery for the license type and may be reviewed further if selected through such lottery, provided the applicant pays the additional amount necessary to pay the full fee for entry into such lottery within five business days of being notified by the Social Equity Council that it does not qualify as a social equity applicant. Not later than thirty days after an applicant is notified of a denial of a license application under this subsection, the applicant may appeal such denial to the Superior Court in accordance with section 4-183.
(2) Upon determination by the Social Equity Council that an application selected through the lottery process does not qualify for consideration as a social equity applicant, the department shall request that the third-party lottery operator identify the next-ranked application in the applicable lottery. This process may continue until the Social Equity Council has identified for further consideration the number of applications set forth on the department's web site pursuant to subsection (b) of this section or the lottery indicates that there are no further applications to be considered.
(3) For each license type, the Social Equity Council shall identify for the department the applications that qualify as social equity applicants and that should be reviewed by the department for purposes of awarding a provisional license.
(4) Any application subject to, but not selected through, the social equity lottery process shall not be reviewed as a social equity application but shall be entered into the lottery for the remaining applications for the license type.
(5) After receiving the list of social equity applications from the Social Equity Council, the department shall notify the third-party lottery operator, which shall then conduct an independent lottery for all remaining applicants for each license type, rank all applications numerically including those that exceed the number to be considered, and identify for the department all applications to be reviewed. The number of applications to be reviewed shall consist of the applications ranked numerically one through the maximum number set forth in accordance with subsection (b) of this section, provided that if fewer social equity applicants are identified pursuant to subdivision (3) of this subsection, the maximum number shall be the number necessary to ensure that fifty per cent of the applications for each license type identified through the lottery process are social equity applicants.
(6) The numerical rankings created by the third-party lottery operator shall be confidential and shall not be subject to disclosure under the Freedom of Information Act, as defined in section 1-200.
(e) The department shall review each application to be considered, as identified by the third-party lottery operator or Social Equity Council, as applicable, to confirm it is complete and to determine whether any application: (1) Includes a backer with a disqualifying conviction; (2) includes a backer that would result in common ownership in violation of the cap set forth in section 21a-420i; or (3) has a backer who individually or in connection with a cannabis business in another state or country has an administrative finding or judicial decision that may substantively compromise the integrity of the cannabis program, as determined by the department, or that precludes its participation in this state's cannabis program.
(f) No additional backers may be added to a cannabis establishment application between the time of lottery entry, or any initial application for a license, and when a final license is awarded to the cannabis establishment, except, if a backer of an applicant or provisional licensee dies, the applicant or provisional licensee may apply to the commissioner to replace the deceased backer, provided if such applicant is a social equity applicant, the Social Equity Council shall review ownership to ensure such replacement would not cause the applicant to no longer qualify as a social equity applicant.
(g) If an applicant or a single backer of an applicant is disqualified on the basis of any of the criteria set forth in subsection (e) of this section, the entire application shall be denied, and such denial shall be a final decision of the department, provided backers of the applicant entity named in the lottery application submission may be removed prior to submission of a final license application unless such removal would result in a social equity applicant no longer qualifying as a social equity applicant. If the applicant removes any backer that would cause the applicant to be denied based on subsection (e) of this section, then the applicant entity shall not be denied due to such backer's prior involvement if such backer is removed within thirty days of notice by the department of the disqualification of a backer. Not later than thirty days after service of notice upon the applicant of a denial, the applicant may appeal such denial to the Superior Court in accordance with section 4-183.
(h) For each application denied pursuant to subsection (e) of this section, the department may, within its discretion, request that the third-party lottery operator identify the next-ranked application in the applicable lottery. If the applicant that was denied was a social equity applicant, the next ranked social equity applicant shall first be reviewed by the Social Equity Council to confirm that the applicant qualifies as a social equity applicant prior to being further reviewed by the department. This process may continue until the department has identified for further consideration the number of applications equivalent to the maximum number set forth on its Internet web site pursuant to subsection (b) of this section. If the number of applications remaining is less than the maximum number posted on the department's Internet web site, the department shall award fewer licenses. To the extent the denials result in less than fifty per cent of applicants being social equity applicants, the department shall continue to review and issue provisional and final licenses for the remaining applications, but shall reopen the application period only for social equity applicants.
(i) All applicants selected in the lottery and not denied shall be provided a provisional license application, which shall be submitted in a form and manner prescribed by the commissioner. Applicants shall have sixty days from the date they receive their provisional application to complete the application. The right to apply for a provisional license is nontransferable. Upon receiving a provisional application from an applicant, the department shall review the application for completeness and to confirm that all information provided is acceptable and in compliance with this section and any regulations adopted under this section. If a provisional application does not meet the standards set forth in this section, the applicant shall not be provided a provisional license. A provisional license shall expire after fourteen months and shall not be renewed. Upon granting a provisional license, the department shall notify the applicant of the project labor agreement requirements of section 21a-421e. A provisional licensee may apply for a final license of the license type for which the licensee applied during the initial application period. A provisional license shall be nontransferable. If the provisional application does not meet the standards set forth in this section or is not completed within sixty days, the applicant shall not receive a provisional license. The decision of the department not to award a provisional license shall be final and may be appealed in accordance with section 4-183. Nothing in this section shall prevent a provisional applicant from submitting an application for a future lottery.
(j) Final license applications shall be submitted on a form and in a manner approved by the commissioner and shall include, but not be limited to, the information set forth in this section, as well as evidence of the following:
(1) A contract with an entity providing an approved electronic tracking system as set forth in section 21a-421n;
(2) A right to occupy the location at which the cannabis establishment operation will be located;
(3) Any necessary local zoning approval for the cannabis establishment operation;
(4) A labor peace agreement complying with section 21a-421d has been entered into between the cannabis establishment and a bona fide labor organization, as defined in section 21a-421d;
(5) A certification by the applicant that a project labor agreement complying with section 21a-421e will be entered into by the cannabis establishment prior to construction of any facility to be used in the operation of a cannabis establishment;
(6) A social equity plan approved by the Social Equity Council;
(7) A workforce development plan approved by the Social Equity Council;
(8) Written policies for preventing diversion and misuse of cannabis and sales to underage persons; and
(9) All other security requirements set forth by the department based on the specific license type.
(k) At any point prior to the expiration of the provisional license, the department may award a provisional licensee a final license for the license type for which the licensee applied. Prior to receiving final license approval, a provisional licensee shall not possess, distribute, manufacture, sell or transfer cannabis. The department may conduct site inspections prior to issuing a final license.
(l) At any time after receiving a final license, a cannabis establishment may begin operations, provided all other requirements for opening a business in compliance with the laws of this state are complete and all employees have been registered and all key employees and backers have been licensed, with the department.
(June Sp. Sess. P.A. 21-1, S. 35.)
History: June Sp. Sess. P.A. 21-1 effective July 1, 2021.