Gary Winfield

Winfield Leads Senate Approval of Cannabis Legalization Bill

Bill is first step in undoing a generation of racist, failed drug policy

Today, Senator Gary Winfield (D-New Haven), along with Democrats in the state Senate, led passage of transformative legislation that will legalize recreational adult-use of cannabis, along with its sale, taxation, and regulation. The bill passed the Senate on a 19-17 vote.

This legislation contains measures that will begin the necessary and long-overdue work of fixing the damage caused by decades of failed drug policies. It will develop an expediated path for people from the most-impacted communities to be able to participate in and benefit from the introduction of a new business and job sector in Connecticut. Also, it will support the erasure of cannabis convictions, which will help rectify the impact of cannabis criminalization.

Senate Bill 1118, “An Act Concerning Responsible and Equitable Regulation of Adult-Use Cannabis,” now advances to the state House of Representatives for discussion and a vote.

If recreational adult-use cannabis is legalized, Connecticut would join 18 other states that have legalized such use of cannabis, including New York, Massachusetts, and Maine. According to a recent Sacred Heart University poll, nearly 64% of surveyed Connecticut residents support legalizing cannabis. Also, over 61% of residents support erasure of convictions for recreational cannabis offenses.

Under Senate Bill 1118:

• Legal purchase of cannabis for possession and use will be allowed in small amounts (up to 1.5 ounces in possession and additional 5 ounces in the home or vehicle) starting on January 1, 2022
• Homegrown cannabis will be allowed for medical patients starting on October 1, 2022, with a limited number of plants allowed. Homegrown of the same allowed number of plants will be expanded to all households in July 2023
• Retail sale of cannabis is estimated to begin in May 2022
• $50 million in bonding is authorized for allocation by a Social Equity Council that will help targeted communities with loans to develop a business accelerator program and workforce training
• Half of initial licenses of each license type (ex. cultivators and retailers) reserved for social equity applicants
• The state Department of Consumer Protection will create two lotteries to receive licenses after the first open application period:
  • First lottery for only social equity applicants
  • Second lottery open to all applicants with social equity applicants able to participate in as well
• Support safe driving by banning the driver and passengers in a vehicle from using cannabis when the vehicle is operating. Also, creates a new pretrial impaired driving intervention program
• Makes it a Class A misdemeanor to sell or provide cannabis to a person under 21 years old. Plus, an individual allowing someone under 21 years old to loiter at a cannabis store will receive a $1,000 fine on the first offense with subsequent offenses as a Class B misdemeanor
• Certain drug possession convictions between January 1, 2000 and October 1, 2015 will be automatically erased. Option for erasure of certain cannabis-related convictions outside of this time period will require petitioning
• The revenue from a 3% municipal sales tax will go toward the municipality where the retail sales took place. In addition to the 6.35% state sales tax will be placed, the THC content of the product purchased will be taxed by volume. Connecticut will generally have at least a 4% percent lower collective tax rate than New York’s cannabis tax rate

A social equity applicant is an individual or partners that have at least 65% majority ownership in a cannabis establishment and meet both additional criteria:

• Have an average household income of less than 300 percent of the state median household income
• A resident of a disproportionally impacted area (DIA) for five of the last ten years, or a resident of a DIA for nine years before turning 18 years old
• A disproportionally impacted area means a U.S. census tract in Connecticut determined by the Social Equity Council as having a historical conviction rate for drug-related offenses that is above one-tenth and an above 10% unemployment rate.

The legislation provisions regarding social equity applicants in Connecticut’s cannabis industry ensures that communities that have suffered under the criminalization of cannabis are included in the job and economic development benefits of a growing industry across the nation. The United States added over 64,000 full-time, legal cannabis jobs in 2018, according to a joint 2019 report by Leafly, a cannabis industry site, and Whitney Economics. New York estimates its legalization of cannabis will generate between 30,000 to 60,000 jobs.

Senate Bill 1118, “An Act Concerning Responsible and Equitable Regulation of Adult-Use Cannabis” would enact a series of measures:

Legal Possession and Use – Legal for People 21 Years and Older

• Purchase of cannabis for possession and use will be legal for people 21 years and older effective on January 1, 2022. A person is allowed to have up to 1.5 ounces with an additional five ounces secured in the person’s home or vehicle
• Homegrown cannabis does not count toward the allowed amount
• Homegrown – legal possession and use for medical patients starts on October 1, 2022. A medical patient in Connecticut may have 3 mature plants and 3 immature plants. There is a limit of 12 plants per household
• Starting July 1, 2023, any adult in the state may have the allowed amount of homegrown plants

Ensuring Equity in Connecticut’s Cannabis Business and Job Sector

The legislation contains several provisions to start the necessary work of repairing the damage caused by years of failed cannabis criminalization policies. Further, it will work to ensure communities most negatively-impacted by those polices are included in receiving the economic benefits that come from the new business and job sector in the state.

A 15-person Social Equity Council, with an executive director and appropriated funding, will be created. This council will determine the final guidance and rules applying to social equity applicants, and will review their applications.

Social equity applicants will have early access to the licenses to participate in the state’s cannabis industry by having 50% of the first licenses reserved for them. Also, there will be two license lotteries to follow the initial open application period. One of the lotteries is dedicated to just social equity applicants and the second lottery is open to all applicants, including social equity applicants. The state Department of Consumer Protection (DCP) will determine the max number of initial available applications for each license type.

Additional equity and business development provisions in the legislation are:

• $50 million in bonding for co-use by the Social Equity Council and the state Department of Economic and Community Development for loans to develop property for cannabis establishments, workforce training and a business accelerator program
• A 40% tax credit for angel investors investing in Connecticut cannabis businesses, which is above the usual 25% tax credit for investments in other business sectors
• Medical cannabis growers will be allowed to expand their license into recreational production. This expansion would require creating a social equity plan, a workforce development plan, a $500,000 contribution to social equity programs, and a $3 million conversation fee. There are currently four cannabis approved growers (“producers” in statute)
• Medical cannabis dispensaries can become hybrid-retailers (licensed to sell both medical and recreational cannabis) with a workforce development plan and $1 million conversion fee

The conversation fee on medical growers and dispensaries will have opportunities available to reduce the fee with social equity ventures.

Regulation of Licenses and Worker’s Rights

• DCP will require licenses and background checks for cultivators, micro-cultivators, packaging facilities, retailers, hybrid-retailer (sells both recreational and medical cannabis), food manufacturers, product manufacturers, and delivery services. Employees would have to be licensed or registered
• DCP will develop a data tracking system of cannabis in Connecticut that is produced, manufactured, transported, or sold
• Each licensed entity (ex. a cannabis retailer) must have a labor peace agreement with a bona fide labor organization. Also, any licensed entity will have to have a project labor agreement on any $5 million or more construction project

Cannabis Tax Revenue Structure in Connecticut and Regional Competitiveness

The legislation will enact a tax rate structure on retail sale of cannabis that provides a new source of revenue to support Connecticut’s towns and cities. Plus, it places the state on strong footing to compete with neighboring states where cannabis is legal.

• A 3% percent municipal sales tax based on gross receipts. Revenue from this tax will be directed to the town or city where the retail sales occurred
• 6.35% state sales tax
• A tax based on THC content of the product:
• 2.75 cents per milligram of THC for cannabis edibles
• 0.625 cents per milligram of THC for cannabis flower
• 0.9 cents per milligram of THC for all other product types

The inclusion of a tax on THC content of the product creates a stable source of tax revenue as the cannabis market progresses in future years.

Also, this retail tax rate structure means that Connecticut will generally have at least a 4% lower tax rate than New York’s cannabis tax rate and the state will be in the same tax rate area as Massachusetts.

Erasure of Convictions, Enforcement, Penalties, and Preventing Underage Use

The following penalties will be applied to those 21 and over for illegal possession or use. These are different than the penalties for violating laws pertaining to growing, manufacturing, illegal sales, and other regulated actions:

• Illegal Low Amount: Meaning 1.5 to 5 ounces in possession or 5-8 ounces in the person’s home or vehicle
• 1st Offense – $100 fine
• 2nd Offense – $250 fine
• Illegal Higher Amount: Meaning above 5 ounces in possession or over 8 ounces in a person’s home or vehicle
• 1st Offense – $500 fine
• 2nd Offense – Class C misdemeanor

Several measures will be put into effect to set a framework for erasure of convictions; protect privacy; enforce safe driving; and develop new diversionary programs

• People convicted of certain drug possession between January 1, 2000 and October 1, 2015 will have automatic erasure of their convictions
• Convictions before and after those above dates, and convictions for cannabis paraphernalia or sale of under 8 ounces of cannabis will have to petition the courts for an erasure
• At least a reasonable suspicion of five ounces of cannabis is required to declare probable cause by law enforcement, and law enforcement may not use the smell of cannabis for probable cause
• POST (Connecticut Police Officer Standards and Training Council) will create standards for law enforcement to use in the field for nontestimonial drug influence evaluations. Also, an accident that results in serious bodily injury will require a law enforcement officer to assess a person suspected of drug influence
• Both the driver and passengers in the vehicle are not allowed to use cannabis when the vehicle is operating
• Creates new diversionary programs to allow the suspension of prosecution including a pretrial impaired driving intervention program and a pretrial drug education and community service program
• If a court finds someone is drug dependent, the court can suspend prosecution with the order that the person enter into a substance abuse treatment program

Discouraging Underage Use of Cannabis and Penalties Against Selling to Underage Individuals

The legislation implements several provisions to dissuade underage (under 21 years old) use of cannabis including:

• Banning TV, radio, internet, print, or billboard advertising unless the advertiser has reliable evidence that 90% or more of the audience is 21 years old or above
• A person under 21 years old lying about their age or using a fake ID to buy cannabis is a Class D misdemeanor

Also, people under 18 years old found to illegally possess and use less than 5 ounces of cannabis will receive a warning and possible referral to youth services bureau. The second offense would require a referral and following offenses would have the youth adjudicated as a delinquent. If the offense involves more than 5 ounces it is an automatic adjudication as a delinquent.

For illegal possession and use of less than 5 ounces by a person between 18 and 20 years old, the penalties would be a $50 fine on the first offense and following offenses carry a $150 fine with an option to do six hours of community service. If above 5 ounces, then it is a $500 for first offense and offenses after are a Class D misdemeanor.

In addition, a person selling or providing to, inducing the purchase of, and allowing the use in someone’s home of cannabis by someone under 21 years old is a Class A misdemeanor. Also, someone allowing a person under 21 to loiter in a cannabis store will face a $1000 fine on the first offense and is a Class B misdemeanor on subsequent offenses.