Cannabis CT social equity businesses can apply for low-interest loans from $50 million fund

Cannabis entrepreneurs in the state’s Social Equity Program can now apply for low-interest loans from the Social Equity Council’s $50 million fund, according to the Connecticut Cannabis Chamber of Commerce.

The fund, which was approved by lawmakers when the adult-use cannabis program was created, is open to social equity partners with a provisional license.

A business acceleration program is also planned, according to the Social Equity Council.

“Access to capital is critical to the success of any social equity venture, especially in a capital-intensive industry like cannabis cultivation,” chamber president Adam Wood said in an email. .

“Interest rates as high as 65% have been seen due to some of the uncertainties and legal challenges associated with lending to cannabis businesses,” he said. “The Connecticut Social Equity Council deserves huge credit for starting this $50 million loan program when it can still make a difference for these new businesses in our state.”

The state Social Equity Council also voted on Monday to accept CohnReznick’s recommendation on “the reconsideration of six social equity lottery applications that did not previously meet the ownership and control criteria established by the Council.” , said a spokesperson for the agency.

“Following this vote, reconsidered applicants who have also met the residency and income criteria will be referred to DCP for the next steps in the review process,” spokeswoman Kristina Diamond said in an e-mail. -mail.

“The Board also voted to accept CohnReznick’s recommendation to vary the SEC’s July 12, 2022 ruling by approving the social equity status of nominees The Goods THC Co and Hartford Cannabis Company, which had previously been denied,” according to Diamond. “Both candidates will now advance through the authorization process established in Section 149 of Public Law 21-1 for growers located in a disproportionately affected area.”

All applicants applying for social equity status are first reviewed by auditing and accounting firm CohnReznick, a third-party reviewer hired by the SEC to create a comprehensive review system.

Social equity applicants, who will account for half of the licenses approved by the state Department of Consumer Protection, are people who have lived in a “disproportionately affected area,” an area that had a rate of high sentencing or high unemployment due to the so-called war on drugs.

Bloomfield’s Mark Christie, who applied for a social equity license as FRC Holdings, is still pushing to raise the $3 million licensing fee that social equity applicants must pay to receive grants. provisional licenses.

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“I don’t know why you can’t borrow it for the $3 million,” he said. “That’s not even a sensible business conclusion. If you’re going to give it to people for start-up costs, how can license fees not be included in start-up costs? »

He said a low-interest loan would help, though. “Obviously that will help in some way,” he said. “Our budget is about $35 million to do everything we’d like to do,” including the $3 million fee.

“It’s a capital-intensive business,” Christie said. “I think this loan program will probably help anyone who needs money, but it will definitely help people who want to participate and who don’t fall into the culture category.”

A requester who wants to make a delivery may have to spend $75,000 on a truck, Christie said. “If I can fetch $50 or $60 [thousand] there,” he said.

“It’s good to know he’s available,” he said.

“There’s going to be a lot of people that it’s going to help. We will definitely apply once I see what the conditions are. … We will try to enter where we can fit in. I’m just glad they’re doing something rather than nothing,” Christie said.

Ed Stannard can be reached at [email protected].

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