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Law Connecticut

So often when states go legal the medical patient is forgotten. Hopefully with the selling frenzy medical patients can get their supply. In the beginning stores may run low on products. Good luck Connecticut . Let’s get rid of illegal cannabis.
 

Connecticut Marijuana Industry Tax Breaks Signed Into Law By Governor



The governor of Connecticut has signed budget legislation that includes provisions to provide state-level tax relief to licensed marijuana businesses that are currently prohibited for making federal deductions under an Internal Revenue Service (IRS) code known as 280E.

Gov. Ned Lamont (D) approved the package on Monday, touting the overall tax relief and specifically highlighting how much money the cannabis industry is estimated to save with the new policy.

Giving marijuana businesses the state-level 280E workaround is expected to translate into $4.7 million in industry relief for the 2024 fiscal year, which will increase to $6.2 million in the 2025 fiscal year, the governor’s office said.

A separate, more comprehensive overview from the legislature’s Office of Fiscal Analysis shows those savings growing to $9.6 million in 2026, $11.4 million in 2027 and $13.5 million in 2028.

The newly enacted budget measure also contains provisions on appropriations for cannabis social equity, substance misuse prevention and regulation efforts. And it further repeals a tax credit for marijuana “angel investors” who financially support new cannabis businesses—a policy change proposed by the governor earlier this year.

According to the Office of Fiscal Analysis, the state is positioned to save $12.5 million in the 2024 fiscal year by ending that angel investor credit. It’s estimated to save $15 million in each subsequent year through 2028.

“I am glad to sign a bill providing tax relief to our residents,” Lamont said in a press release. “By working together collaboratively, we are making Connecticut stronger and adopting policies that benefit the people who live here. I thank the legislative leaders on both sides of the aisle for their work on this biennial budget.”
Under the new law, licensed cannabis businesses in the state will be able to deduct “the amount of ordinary and necessary expenses that would be eligible to be claimed as a deduction for federal income purposes…but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act.”

The 280E fix is consistent with legislation that lawmakers in several states have pursued to provide relief for state marijuana markets, which face significantly higher effective tax rates under federal prohibition.

For example, Illinois lawmakers sent a budget bill to the governor last month that includes language similarly allowing state-licensed cannabis to take tax deductions that they’re barred from doing at the federal level under the IRS prohibition.

Also, the governor of New Jersey signed legislation last month to allow licensed marijuana businesses to deduct certain expenses on their state tax returns as a partial IRS 280E workaround. Lawmakers in Iowa, New York, Pennsylvania and Virginia have similarly pursued tax relief for each of their state’s marijuana markets.
The New York Senate passed a bill last week to provide a 280E fix for New York City cannabis companies at the local level because the already-enacted statewide reform didn’t affect the city’s separate tax law.
 

Marijuana Home Cultivation Becomes Legal In Connecticut This Weekend, And Officials Want People To Do It ‘Responsibly’


Connecticut officials are encouraging adults to use “safe and healthy gardening practices” if they choose to grow their own marijuana plants when that activity officially becomes legal on Saturday.


The state Department of Consumer Protection (DCP) published a notice on Tuesday that reminds people about the upcoming policy change, the delayed rollout of which was part of a broader cannabis legalization bill that Gov. Ned Lamont (D) signed into law in 2021.



Separately, the governor also signed new marijuana omnibus legislation on Monday that seeks to build upon the state’s legal cannabis program.


With respect to home grow, as of July 1, adults 21 and older will be able to cultivate up to six cannabis plants (only three of which can be mature) for personal use—with the total number of plants capped at 12 per household.


The law allowed medical cannabis patients to begin growing their own plants in October 2021, and now that right is being extended to all adult consumers over the age of 21.


“Adults who choose to grow their own cannabis should use safe and healthy gardening practices for growing any products they intend to consume,” DCP Commissioner Bryan Cafferelli said in a press release. “Plants should also be kept indoors, out of reach and out of sight from children and pets.”



The notice adds that adults who use marijuana “are reminded to do so responsibly, including storing cannabis products in their original child-proof packaging, locked up and out of reach of children and pets.”


This home grow option is being legalized about six months after Connecticut’s first adult-use retailers opened shop. And the market has quickly expanded, with recreational sales reaching a record high and eclipsing medical cannabis purchases for the first time in May.


Lamont separately signed a marijuana omnibus bill this week that contains a number of reforms, including the establishment of off-site event permits for marijuana retailers, restricting intoxicating hemp-derived products and creating a new Office of the Cannabis Ombudsman.



It will additionally establish a definition for edible cannabis products and revise the rules for the state’s lottery system for marijuana business licensing.
 

Connecticut's first cannabis grower Theraplant sold


One of the state’s four active cannabis producers has new ownership following foreclosure proceedings, according to a filing with the Securities and Exchange Commission.


The new owners of Theraplant is a company called NewCo, which is a subsidiary of East Hampton N.Y.-based DXR Holdco, according to a report filed on July 21 with the SEC.

Theraplant was owned by the Greenrose Holding Company, which bought the cannabis producer in 2021. The foreclosure agreement wipes $4,107,400 of debt off the books and puts Theraplant into NewCo’s hands, according to the filing.

Greenrose will maintain an additional $5 million in debt, which will be satisfied following completion of the foreclosure agreement. Bernard Wang, named CFO of Greenrose in 2022, will exit the company per the agreement.

According to a report by Bloomberg Law, Greenrose investors have filed a lawsuit against the company’s board and its largest creditors, Silver Point Capital LP, to stop the foreclosure.

Theraplant is one of four cannabis producers currently in operation in Connecticut, the first to legally cultivate medical cannabis. “In September 2014, we were the first producer to release cannabis onto the Connecticut market,” according to the company’s website.

“Cannabis establishments are required to notify and receive approval from the department prior to any change in ownership which includes the addition, removal or replacement of backers,” said Kaitlyn Krasselt, spokesperson for the state Department of Consumer Protection. “Any new backers associated with the ownership change must register with the department and undergo a background check.”

Krasselt said the foreclosure and change in ownership should not affect supply. Theraplant products are sold in 18 recreational and hybrid dispensaries across Connecticut.

“The change did not impact their operations and they are continuing to supply the market without incident,” she said. “Maintaining appropriate market supply, particularly for medical patients, remains a priority for the department and once notified of a proposed change in ownership the department reviews the transaction for any supply impacts and works with licensees to ensure adequate supply.”
 

Connecticut Cannabis Gifting Event Receives Cease-and-Desist Letter

The HighBazaar has been happening since 2022, but the attorney general recently decided to crack down on what “appears” to violate state law.​


In Connecticut, the “HighBazaar” is a private cannabis event that has been held since 2022. The Masonic Temple Day Spring Lodge in Hamden hosts these events, which in the past has attracted hundreds or even thousands of people. The event is what many news outlets and politicians call a cannabis “gifting party,” where attendees pay a fee for entry and can purchase cannabis accessories or obtain “gifts” that come with cannabis.


Now, Connecticut Attorney General William Tong is claiming that the event violates state law. Tong recently sent a cease-and-desist letter to HighBazaar event hosts Joseph Accetulo and Cody Roberts. “Our office has become aware that you are involved in organizing recurring, unlicensed cannabis markets under the name HighBazaar. It appears that these events involve the illegal marketing and sale of cannabis outside of the regulated market and that the events are accessible to individuals under the age of 21,” stated the cease-and-desist letter. “These events appear to violate the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a, et seq., the Responsible and Equitable Regulation of Adult-Use Cannabis Act, General Statutes § 21a-420, et seq., and/or other applicable laws and regulations. We request that you cease holding these events immediately. If you do not do so, our office will explore all legal options.”


Neither hosts have commented on the letter yet, but CT Insider spoke with Christina Capitan, CT CannaWarriors founder who has previously been involved with HighBazaar. Capitan described Tong and his office are “against us in service of a corporate monopoly puts [former Gov.] Ned Lamont as the Face of the Drug War 2.0.” “While we are disappointed, we are not surprised, as this is simply a continuation of Gov. Lamont’s efforts to criminalize cannabis home growers while simultaneously denying anyone without millions the ability to get a legal license in Connecticut,” Capitan said.


Another CannaWarriors member, Ivellise Correa, explained the harmless nature of the events. “It’s just a flower. We’re not selling crack. This is a craft cannabis community,” Correa said.


Not everyone is happy with the current state of Connecticut’s cannabis industry. Louis Rinaldo told CT Insider why now is the time to reevaluate these cannabis events. “It’s time for us to collectively pivot to a more populist solution, one that opens up the market to local small craft producers and caregivers,” Rinaldo said.


While the HighBazaar has remained private, it has created a stark divide between advocates and politicians. “On one side we have a group of advocates whose net impact on cannabis policy has been regressive, after flaunting their exploitation of the gifting loophole and forcing state legislators to close it,” Rinaldo explained. “On the other side, we have elected officials who instead of serving the people, serve as enforcers of market share protectionism for the state’s four incumbent licensed producers. All while frustrated patients and consumers continue to source from outside Connecticut’s regulated market due to ongoing quality, pricing, and trust concerns.”


In March 2022, House Bill 5329 was introduced and by May it was signed by Gov. Ned Lamont. It implemented limitations for cannabis gifting, as well as a charge violators $1,000 for gifting.


Recreational cannabis sales launched in Connecticut in January 2023, allowed existing medical cannabis dispensaries to be licensed to sell adult-use cannabis. Immediately after sales began though, some legislators proposed changes to the state cannabis program, including new application fees.


In February, Attorney General Tong sued five retailers for conducting delta-8 THC cannabis products sales under the Connecticut Unfair Trade Practices Act. Cannabis products in Connecticut cannot be sold by unlicensed retailers and must meet rigorous testing and packaging requirements. Period,” said Tong. “Any unlicensed Connecticut retailer selling delta-8 THC products that purport to contain high levels of THC is breaking the law and may be subject to both criminal and civil penalties.”


Meanwhile, adult-use cannabis sales in Connecticut continue to rise. As of December 2023, annual cannabis sales earned between January 2023-November 2023 reached $127 million. That includes an increase in monthly sales for every month last year, with January kicking off sales at $5.1 million, followed by increases in February ($7.02 million), March ($9.6 million), April ($10.2 million), May ($11.5 million), June ($12.5 million), July ($13 million), August ($14 million), September ($14.3 million), October ($14.7 million), and November ( $15.3 million). Data for December 2023 sales has not yet been reported by the Department of Consumer Protection.


Medical cannabis on the other hand, has been fluctuating slightly in overall sales, with the lowest income recorded in January 2023 with $8.2 million, and the highest set at $12.6 million in March 2023.


Recently in December 2023 though, where alcohol sales are prohibited on Christmas Day and New Year’s Day, cannabis sales were still permitted. “And, because we regulate many things you may be wondering about, Connecticut Law does not prohibit the sale of cannabis, or limit your ability to place wagers during the holidays,” said Consumer Protection Commissioner Bryan T. Cafferelli. “No matter how you choose to spend the holidays, please know your limit, arrange designated drivers and be respectful of the establishments and communities where you celebrate.”
 

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