Hundreds of shoppers filtered through rows of vendors selling novelty art and clothing earlier this year at High Bazaar, a Hamden festival where a “gift” of a marijuana product often accompanied the items they purchased.
But the High Bazaar parties are on hold for now, after the town of Hamden claimed permitting violations. And while a hearing in that civil case is scheduled for later this week, the state legislature is considering a bill that would outlaw such “gifting.”
House Bill 5329 would impose up to a $10,000 fine and a year of jail time on violators. Supporters of the legislation said it would help keep sales in the market regulated, although some hemp and cannabis advocates were wary that it would re-criminalize marijuana.
The bill also includes provisions to cap the number of equity joint ventures for producers and to outlaw billboard advertising. Equity joint ventures allow partnerships between social equity applicants and other cannabis businesses.
“We appreciate that gifting will go on between people in the privacy of their homes,” said Rep. Mike D’Agostino, a Democrat who represents Hamden. “An event that’s organized, that rents space and is really a market just violates the entire intent of the statute that we put in place last year.”
D’Agostino chairs the General Law Committee, which heard public comments on the bill Tuesday.
Cannabis gifting is a practice that’s been used in Washington, D.C., where recreational marijuana sales aren’t allowed but possession of less than 2 ounces has been decriminalized. Vendors sell consumers a product such as a T-shirt, and a cannabis product is included as a gift.
Douglas Moore, a Connecticut resident who has no arms or legs, told the committee that gifting from friends or family is one of the ways he gets his medical marijuana. He’s opted for a medical marijuana card rather than taking pills for the rest of his life, he said.
“For me to actually be a normal person like all of y’all, I need this gift,” Moore said.
Lou Rinaldi, another patient who advocates for programmatic changes including the addition of a patient ombudsman, said there’s an “ever-growing number” of Connecticut cannabis patients who use gifting as their primary means of obtaining their medicine.
“There’s been a direct correlation between increasing patient education and rising concerns about the safety of the program’s medical cannabis products,” Rinaldi said.
Changes to the allowable levels of mold and yeast in medical products left patients worried about the safety of the products late last year. The state Department of Consumer Protection is in the process of officially changing regulations.
D’Agostino reassured Rinaldi, Moore and other patients that the bill wasn’t intended to allow the arrest of people who give marijuana to friends or family — it’s targeted at retail operations, he said.
Bill language specifies that no person is allowed to gift, sell or transfer cannabis to another person in exchange for a charitable donation, as part of a giveaway, or at any location other than those authorized to sell cannabis where items other than cannabis are for sale and that requires club membership for admission.
Rep. Vincent Candelora, the House Republican leader, spoke in support of the bill, citing a lack of regulation for gifted cannabis.
“This glaring gap in our laws was recently exploited by local groups looking to take advantage of the lack of regulatory enforcement,” Candelora said in written testimony.
Several who testified also mentioned the lack of tax revenue on gifted products, a problem that Kevin Sabet, president of Smart Approaches to Marijuana and an industry critic, said is common with gifting. Consumers also often wind up overpaying for the products associated with the gifts, Sabet added.
“These policies ultimately price out legal sellers and allow the underground marijuana market to continue operating,” he said in an emailed statement.
The bill also includes provisions that would outlaw billboard advertising for cannabis products, which people from the industry opposed.
Supporters, including Candelora, said the move would protect minors from exposure to cannabis advertising.
State policy already includes provisions against cannabis advertising that targets minors.
Benjamin Zachs, chief operating officer for dispensary Fine Fettle, said the move would harm business revenues.
“This will stunt significant revenue potential for media companies and billboard companies that the state should want to thrive versus perish,” the company’s written testimony read.
Equity joint ventures
The bill also includes language that says a producer “shall commit to create two equity joint ventures to be approved by the Social Equity Council,” a suggestion from the council itself.
The joint ventures are partnerships between a business entity and a licensed medical marijuana producer or medical marijuana dispensary that is at least 50% owned by a social equity applicant. Social equity status is determined by income and residency requirements.
It’s one of several measures designed to ensure those who were disproportionately harmed by the war on drugs benefit from the emerging market.
Joint ventures aren’t subject to the lottery system that most recreational licensees need to go through.
Andréa Comer, deputy commissioner for the Department of Consumer Protection and a Social Equity Council member, said the intention was to cap social equity ventures at two. The change was based on feedback from the public and legislators, she added.
Rep. Juan Candeloria, D-New Haven, questioned whether the language was sufficient to achieve its goal and ensure large multi-state operators that already have several joint equity ventures don’t get two additional ventures.
“A lot of the current producers and the dispensaries are out of state,” Candeloria said. “Our intention was to ensure that equity applicants from our state have the opportunity to conduct cannabis businesses.”
Multi-state operators have already shown interest in Connecticut’s budding cannabis market.
In the fall, Verano Holdings Corp., which operates in at least 12 states, acquired Willow Brook Wellness, Caring Nature and Connecticut Pharmaceutical Solutions, Inc., one of four licensed cannabis producers in the state.
And in March, multi-state company Greenrose Acquisition Corp announced that it would acquire production facility Theraplant, in Watertown.
The cap would aim to ensure Connecticut social equity applicants and businesses profit from the market.
Several hemp farmers also spoke to the issue, asking that they be allowed to participate in the recreational market.
“With the current law as it stands, more than 99% of all recreational marijuana in the state of Connecticut will eventually be produced by large Multi-State Operators who are headquartered in other locations,” said Brant Smith, of Hemp House Farms in Cheshire. “The farming community of Connecticut; who live, work, and pay taxes here, will be effectively shut out of this new industry.”