1. Understand regulatory and legal requirements. Do market research.

Research the laws and regulations governing adult-use or medical-use cannabis for more information about the regulatory requirements for licensure in the city or town you wish to operate in.

Connecticut Cannabis Legalization

In 2012, medical cannabis was legalized in Connecticut through HB 5389 and sales began in 2014. Initially, only six dispensaries were licensed and this number was then increased to nine in 2016. On December 11, 2018, Connecticut approved nine new licenses.

Recreational cannabis was legalized on 1 July, 2021, through SB 1201. Retail sales began in January 2023.

Connecticut Cannabis Market

All licenses are issued by the Connecticut Department of Consumer Protection.

2. Decide on the type of cannabis business you want to start. Choose a location. Check local zoning regulations.

Cannabis Licenses Types Available in Connecticut

A social equity applicant is an applicant for a cannabis establishment license where 65% of the establishment is owned and controlled by an individual or individuals who:

• had an average household income of less than 300% or three times of the state median household income over the last 3 tax years and
• was a resident of a disproportionately impact area for at least 5 of the 10 years prior to the applicant date or for at least 9 years before the age of 18.

Licensees will not be issued additional licenses that are of the same type as the ones they currently hold. For example, a cultivator licensee will not be issued a micro-cultivator license.

Cannabis Delivery in Connecticut

Delivery service licensees can deliver recreational and medical cannabis to consumers and qualifying patients in Connecticut. Beginning on July 1, 2021, a dispensary may deliver medical marijuana to a patient using their own employees until 30 days after the first 5 delivery service licensees have commenced public operation.

Cannabis Delivery Service by State

3. Develop a solid cannabis business plan. Secure financing.

Cannabis Business Plan

Application requirements include a business plan showing the expected size of the business; anticipated growth; the methods of record keeping; the knowledge and experience of the applicant and any officer, director, manager, and general partner of the business; and other relevant financial and operational components.

4. Submit an application. Pay fees. Prepare and submit the required documents.

How to Get a Cannabis Business License in Connecticut

Application Process:

Information about the relevant criteria and what is deemed to be the commencement of operations can be found in the state’s regulations.

Required information to be submitted with the application is not limited to (adult-use, medical):

* A backer has “a direct or indirect financial interest in a cannabis establishment, and owns 5% or more of a cannabis establishment, in aggregate with their spouse, parent or child, or participates directly or indirectly in the control, management or operation of the cannabis establishment” according to the Department’s official website.

In addition, all backers must complete a backer application before the cannabis establishment application window closes so that they are considered as part of the application. The backer applicant checklists for a social equity applicant or a non-social equity applicant are available on Connecticut’s official website.

Social equity applicants must provide additional information outlined in this document.

Social equity applicants will pay 50% of the amount of all relevant license fees (as shown in the fee tables above) for the first three renewal cycles and the full amount thereafter. However, in the case of license conversion from a dispensary facility to a hybrid retailer or from a producer to an expanded producer license, the social equity licensee must pay the full amount of the fee.

License Conversion from Producer to Expanded Producer/from Dispensary Facility to Hybrid Retailer

Application process:

1. Submit a complete license application with the conversion fee and other required information.
2. The Department will review the application and if approved, the conversion to the expanded producer/hybrid retailer license will be successful.

Information to be provided with the application is not limited to:

• Producer: A medical cannabis preservation plan to ensure that there will be no supply shortages of medical cannabis products. This plan must be approved by the Department. A workforce development plan that meets the requirements set by the Social Equity Council. The plan must be approved by the Social Equity Council.
• Retailer: Every hybrid retailer should have a licensed pharmacist on the premises of its dispensary when the dispensary is open to the public or to qualifying patients and caregivers. Every hybrid retailer should have a private consultation space for qualifying patients and caregivers to meet with pharmacists and a priority entrance for qualifying patients and caregivers must be arranged at the facility.

5. Final approval. Final fees. Final Inspection.

Final inspections are carried out at the end of the application process before the Department issues a license. Some of the items verified during the inspection include:

• The layout of the location matches the submitted floor plan.
• There is adequate camera coverage (no blind spots in required areas).
• The surveillance system is functioning and properly secured.
• The premise is not connected or combined with a residence or another business.
• Cannabis product is secure from public/customer access.

6. Keep track of your ongoing compliance requirements.

Physical security measures, good production practices, packaging, labelling, transport and reporting requirements, taxes and more.

7. License renewal.

Medical Licenses: All licensees must be renewed annually. The licensee must submit a renewal application and the relevant renewal fee to the Department at least 45 days before the license’s expiration date.

Adult-use Licenses: All adult-use licenses must be renewed annually. In order to renew a license, a renewal application must be submitted with the relevant renewal fee to the Department.

Connecticut Cannabis Taxes

There will be three (3) taxes on retail sale of cannabis: the state’s usual 6.35 percent sales tax, a 3 percent sales tax dedicated to the city or town where the sale occurs, and a tax based on THC content that will cost approximately 10 to 15 percent of the sale price. In total, the tax rate is expected to be approximately 20 percent of the retail price of cannabis, in line with the tax rates in Massachusetts.

https://portal.ct.gov/drs/taxes/cannabis/cannabis-tax

In 2023, Connecticut passed legislation that exempt businesses from Section 280E of the federal tax code that allows cannabis companies to deduct business expenses from their state income taxes.

Cannabis Advertising Regulations in Connecticut

Prohibited activities for those advertising cannabis or cannabis-related services include, but are not limited to:

1. Advertising that targets or is designed to appeal to individuals who are under the age of 21.
2. Advertising using any image, or any other visual representation, of the cannabis plant or any part of the cannabis plant, including, but not limited to, the leaf of the cannabis plant.
3. Advertising by means of an electronic or illuminated billboard between the hours of 6 a.m. and 11 p.m.
4. Advertising where less than 90 percent of the audience for the advertisement is reasonably expected to be 21 years of age or older, based on reliable evidence.
5. Advertising using location-based devices such as cell phones. Exceptions exist for mobile apps.
6. Sponsoring or advertising at, or in connection with, charitable, sports, musical, artistic, cultural, social, or other similar events, unless the cannabis establishment has reliable evidence that at least 90 percent of the audience will be 21 or older.
7. Advertising cannabis or cannabis-related products visible to the public within 1,500 feet of an elementary or secondary school ground, recreation center or facility, childcare center, playground, public park, library, or house of worship.
8. Advertising on or in public or private vehicles or at bus stops, taxi stands, transportation waiting areas, train stations, airports, or other similar transportation venues.
9. Operating websites that advertise cannabis or cannabis-related products without verifying that users are 21 years of age or older.
10. Any advertisements from a cannabis establishment shall contain the following warning: “Do not use cannabis if you are under twenty-one years of age. Keep cannabis out of the reach of children.”

(Sec. 21a-421bb. Prohibitions re advertisement of cannabis and cannabis products. Registration of cannabis brand names.)

Main steps in short

• Understand regulatory and legal requirements. Do market research.
• Decide on the type of cannabis business you want to start. Choose a location. Check local zoning regulations.
• Develop a solid business plan. Secure financing.
• Submit an application. Pay fees. Prepare and submit the required documents.
• Final approval. Final fees. Final inspection.
• Keep track of your ongoing compliance requirements.
• License renewal.

Cannabis Extraction/Concentrates Business Plan Sample, Connecticut