Conn. Gen. Stat. § 21a-420o: Provisional cultivator license for social equity applicants. Final license. Location outside of disproportionately impacted area. Conversion to micro-cultivator license.

(a) Thirty days after the Social Equity Council posts the criteria for social equity applicants on its Internet web site, the department shall open up a three-month application period for cultivators during which a social equity applicant may apply to the department for a provisional cultivator license and final license for a cultivation facility located in a disproportionately impacted area, or at another location described in subparagraph (B) of subdivision (1) of subsection (b) of this section, without participating in a lottery or request for proposals. Such application for a provisional license shall be granted upon: (1) Verification by the Social Equity Council that the applicant meets the criteria for a social equity applicant; (2) the applicant submitting to and passing a criminal background check; and (3) payment of a three-million-dollar fee to be deposited in the social equity and innovation account established in section 21a-420f. Upon granting such provisional license, the department shall notify the applicant of the project labor agreement requirements of section 21a-421e. The department shall not grant an application for a provisional cultivator license under this subsection after December 31, 2026.

(b) (1) To obtain a final cultivator license under this section, the social equity applicant shall provide evidence of (A) a contract with an entity providing an approved electronic tracking system as described in section 21a-421n, (B) a right to exclusively occupy the location at which the cultivation facility will be located, which location shall be situated (i) in a disproportionately impacted area, (ii) on any reservation, as defined in section 47-63, of the Schaghticoke, Paucatuck Eastern Pequot or Golden Hill Paugussett indigenous tribe recognized by this state under subsection (b) of section 47-59a, provided such reservation includes at least ten acres of contiguous land and such land comprised part of such reservation on July 1, 2024, (iii) on any parcel of land owned in fee simple by any indigenous tribe recognized by this state under subsection (b) of section 47-59a, provided such parcel includes at least ten acres of contiguous land and is located in a municipality that, prior to July 1, 2024, contained any portion of a disproportionately impacted area, (iv) in the case of an exclusively outdoor grow, in a municipality containing any portion of a disproportionately impacted area, provided (I) such outdoor grow is conducted on land that such municipality has approved for agricultural or farming uses, and (II) all cultivation complies with the provisions of the regulations adopted, and policies and procedures issued, pursuant to section 21a-421j permitting the outdoor cultivation of cannabis, or (v) at a location within this state outside of a disproportionately impacted area, provided the Social Equity Council has verified that such social equity applicant satisfies the criteria established in subdivision (2) of this subsection, (C) any necessary local zoning approval and building permits for the cultivation facility, (D) a business plan, (E) a social equity plan and a workforce development plan approved by the council, (F) written policies for preventing diversion and misuse of cannabis and sales of cannabis to underage persons, and (G) blueprints of the facility and all other security requirements of the department.

(2) (A) Beginning on or after October 1, 2025, a social equity applicant that obtains a final cultivator license pursuant to subdivision (1) of this subsection may conduct all activities authorized in section 21a-420n, except for manufacturing or extraction of cannabis, at a location within this state outside of a disproportionately impacted area as set forth in subparagraph (B)(v) of subdivision (1) of this subsection, provided the social equity applicant agrees to comply with the provisions of this subdivision and submits a written request for verification of compliance to the Social Equity Council, and the council determines and verifies based on evidence deemed sufficient by the council, that (i) in the event such social equity applicant engages in manufacturing or extraction of cannabis, such applicant shall engage in such manufacturing or extraction exclusively at a location situated in a disproportionately impacted area in accordance with the provisions of this chapter and the regulations adopted, and policies and procedures issued, under this chapter, (ii) at least fifty per cent of the employees employed by such social equity applicant to engage in manufacturing or extraction of cannabis shall reside in a disproportionately impacted area, (iii) of the employees employed by such social equity applicant to engage in any activity other than manufacturing or extraction of cannabis, (I) at least twenty-five per cent of such employees shall reside in a disproportionately impacted area during the first year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, (II) at least fifty per cent of such employees shall reside in a disproportionately impacted area during the second year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, and (III) at least seventy-five per cent of such employees shall reside in a disproportionately impacted area during each year beginning with the third year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, (iv) such social equity applicant shall, at such social equity applicant's expense, (I) make transportation available to each of its employees who resides in a disproportionately impacted area in order to transport such employee from such employee's residence to such employee's place of work and from such employee's place of work to such employee's residence, or (II) make advance payment to each of its employees who resides in a disproportionately impacted area for the cost of traveling from such employee's residence to such employee's place of work and from such employee's place of work to such employee's residence, and (v) such social equity applicant shall periodically pay to the Social Equity Council, in a form and manner prescribed by the council, on payment dates established by the council and for deposit in the social equity and innovation account established in section 21a-420f, (I) for the first year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, one-half per cent of the licensee's gross revenue derived from such licensee's sales to unaffiliated third parties for such year, (II) for the second year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, one per cent of the licensee's gross revenue derived from such licensee's sales to unaffiliated third parties for such year, and (III) for each year beginning with the third year after such social equity applicant obtains a final cultivator license and commences cultivation activities under such license, one and one-half per cent of the licensee's gross revenue derived from such licensee's sales to unaffiliated third parties for such year.

(B) The evidence required to be submitted in a written request for verification as set forth in subparagraph (A) of this subdivision shall be submitted to the Social Equity Council in a form and manner prescribed by the council. Upon receipt of a written request for verification under subparagraph (A) of this subdivision, the council shall review the request to determine whether the social equity applicant satisfies the criteria set forth in subparagraph (A) of this subdivision. If the council determines that the social equity applicant does not satisfy such criteria, the council may accept an amended written request for verification or deny such request. Not later than thirty days after the council notifies the social equity applicant that the council has determined that the applicant does not satisfy the criteria set forth in subparagraph (A) of this subdivision, the applicant may appeal from such determination to the Superior Court in accordance with section 4-183.

(C) The Social Equity Council shall identify for the department each social equity applicant that has submitted a written request for verification as set forth in subparagraph (A) of this subdivision, qualifies as a social equity applicant and should be reviewed by the department for purposes of awarding a final cultivator license. After receiving notice from the council that a provisional licensee has been verified and identified by the council pursuant to this subdivision, the department shall proceed with review and processing of such applicant's final license. The Commissioner of Consumer Protection shall not issue a final license to a provisional licensee pursuant to this subdivision unless the council has notified the department of the results of such verification.

(D) Each cultivator issued a final license pursuant to this subdivision shall (i) attest that such cultivator satisfies the criteria set forth in subparagraph (A) of this subdivision at each license renewal, and (ii) comply with all requests for information from the Social Equity Council, and produce copies of all documents necessary for the council to confirm that such cultivator satisfies the criteria set forth in subparagraph (A) of this subdivision, in a form and manner prescribed by the council and not later than two business days after such request. In the event the council determines and verifies that the licensee does not satisfy the criteria set forth in subparagraph (A) of this subdivision, the council shall, after a cure period established by the council, provide to the department a detailed report outlining the basis for the council's determination of noncompliance and any evidence supporting such determination. The council shall concurrently produce a copy of such report to the applicable licensee. Upon receipt of the noncompliance report issued by the council, the department shall schedule a hearing on such matter within forty-five days.

(E) Prior to engaging in any manufacturing or extraction of cannabis, a cultivator licensed pursuant to this subdivision shall apply to the department, in a form and manner prescribed by the commissioner, for an off-site manufacturing endorsement to be issued on or after October 1, 2025. The department may require the cultivator to submit to an inspection of the cultivator's facility prior to issuing such endorsement to ensure that such facility satisfies the provisions of this chapter and the regulations adopted, and policies and procedures issued, under this chapter.

(F) On and after July 1, 2026, any person that holds a final cultivator license issued pursuant to this subdivision shall (i) weigh all cannabis, excluding the leaves or stem of such plant, harvested at such facility not later than twenty-four hours after cutting or trimming such plant and (I) record such weight in an approved electronic tracking system as set forth in section 21a-421n, (II) annually reserve at least eighty per cent of all cannabis weighed pursuant to subparagraph (F)(i) of this subdivision for the purpose of manufacturing or extraction of such cannabis into a cannabis product or cannabis concentrate, and (III) annually sell not more than twenty per cent of all cannabis harvested at such facility, based on the weight recorded pursuant to subparagraph (F)(i) of this subdivision, for distribution as cannabis flower, and (ii) upon each renewal of such final cultivator license, attest that during the then preceding calendar year, such cultivator (I) caused at least eighty per cent of all cannabis weighed and recorded pursuant to subparagraph (F)(i) of this subdivision to be used for the purpose of manufacturing or extraction of such cannabis into a cannabis product or cannabis concentrate, and (II) sold not more than twenty per cent of all cannabis harvested at such facility, based on the weight recorded pursuant to subparagraph (F)(i) of this subdivision, for distribution as cannabis flower.

(c) If the department grants a provisional cultivator license to any person under subsection (a) of this section, such person may apply to the department, in a form and manner prescribed by the commissioner, to convert the provisional cultivator license to a micro-cultivator license, without paying any conversion fee or additional provisional license fee, provided such person has not created more than two equity joint ventures that have obtained final licensure. As part of such application, such person shall attest that such person shall:

(1) Surrender such provisional cultivator license effective immediately upon the department issuing the micro-cultivator license;

(2) Be entitled to create two equity joint ventures, which shall include any equity joint venture created prior to conversion to a micro-cultivator license;

(3) Comply with all provisions of law governing micro-cultivators; and

(4) Not have any change of ownership or control associated with the conversion to a micro-cultivator license.

(d) The department shall not issue a final license to a micro-cultivator provisional licensee unless such licensee has complied with all final licensure requirements set forth in this section and section 21a-420g.