Hartford Cannabis Co. sues CT Social Equity Council after failing to obtain cultivator license – Hartford Courant
Hartford — A cannabis company has appealed to the Superior Court challenging the Social Equity Council’s decision that the company did not qualify as a social equity applicant for licensing purposes temporary farmer.
The Hartford Cannabis Co., through its attorney Michael Donnelly of Murtha Cullina, claims in its 22-page complaint filed July 22 that the state and SEC changed licensing requirements along the way and that the company has not had the opportunity to modify or supplement its application to meet these new requirements.
To qualify for social equity status under state law, an applicant must meet residency, income, property, and control requirements.
The SEC ruling said Hartford Cannabis Co. met the residency and income requirements, but did not meet the ownership requirement.
“Contradicting documents have been provided regarding who controls the company and who its officers are,” the state said in its July 13 denial to Hartford Cannabis Co.
Furthermore, the denial letter states that there was “no evidence that the [Social Equity Applicant’s] influence at least 65% of daily business.
The complaint alleges that the SEC lacked the 65% control rule when it issued its documentation requirements for a grower’s preliminary license on Jan. 14.
Instead, this requirement was briefly mentioned at an SEC meeting on April 5 – about two months after the application period opened (it ended on May 4) – during a presentation by CohnReznick, a consultant hired by the State to assist in the application process. , says the complaint.
“[T]The required daily check change is so small on the screen that it is literally unreadable… and was only displayed for two minutes and ten seconds,” the lawsuit states. “During this short period, they describe the change in criteria as simply a ‘tool’ for reviewers and not as the material modification of the criteria for approval, which it was. It was this very change that resulted in the denial of Hartford Cannabis’ application.
The complaint states that the SEC did not debate, discuss, or provide an update to its online checklist to the level of scrutiny required by an SEA candidate.
Komla Matrevi, staff attorney for the Social Equity Council, wrote in a March memorandum that the social equity candidate should have day-to-day operational control of the business, but the memorandum did not specify that the level of control be 65%, or any percentage, of such matters, the lawsuit said.
In addition, the vetting rule change violated assurances that SEC Executive Director Ginne-Ray Clay gave to applicants in March 2022, according to the complaint.
“The Board’s failure to debate and vote on this material change to review criteria not only constituted an inappropriate retrospective regulatory change, but violated highly enabling legislation regarding such review,” the complaint states.
Hartford Cannabis Co. filed its application for a Provisional Grower’s License on April 29. She argues that she was not given the opportunity to revise, complete or refine her application to ensure compliance with the screening requirement that was adopted during the application process.
In addition, the company argues that it still met the 65% control requirement, even though it was legal, and that the decision was “patently wrong”, the legal standard necessary for the company to reverse the decision.
Among other things, the complaint alleges that social equity nominees own 65.10% of the company’s stock and that the company’s president, Gloribel Diaz, a social equity nominee, owns 59.38%. .
Additionally, TJ Clarke is a social equity nominee and is also the company’s chief executive, according to the complaint.
“Chairman Diaz controls the board of directors and another social equity contender, Thomas Clarke, controls the ‘general and active management of the affairs of the company’ and ‘will devote his full attention and time’ to the management of company,” the complaint reads. “Therefore, SEAs have operational authority over the day-to-day affairs of the company and voting rights to direct the management, officers, policies, and beneficial interests of the company.”
The question arises whether the social equity licensing process is unique or whether there will be other opportunities to obtain a license.
However, Hartford Cannabis Co. says the SEC’s July 13 denial will cause a delay in obtaining a final license “for a cultivation facility to be located in a disproportionately affected area.”
“The SEC’s denial and delay of Hartford Cannabis’ license places the company at a significant disadvantage against competition from other applicants for such properties,” the complaint states.
The company, according to the complaint, will also jeopardize an agreement it entered into with another company for the “exclusive use of…proprietary cannabis genetics, brand name, recipes, packaging, logos and goods in Connecticut”.
The state and the SEC are represented by the office of Attorney General Andrew Tong, who said Monday he had no comment on the appeal.
The General Assembly and Governor Ned Lamont signed into law last year a law allowing cannabis use by adults. The law includes a social equity initiative to recognize the government’s war on drugs that has disproportionately prosecuted suspects from blacks and other communities of color.
Applicants are being reviewed for licenses as a grower, producer, manufacturer, food and beverage manufacturer, sales, dispensary facility, delivery service, and carrier.