Publications

August 1, 2024 (Update): The following client alert was published in Westlaw Today. To read the publication, click here.

Our previous client alert on May 22, 2024, discussed the passage of Public Act No. 24-76, which was signed by Governor Lamont on May 11, 2024. This second advisory addresses the three other public acts that relate to Connecticut’s cannabis industry, which have also been signed into law by Governor Lamont – Public Acts 24-76[1], 24-115[2], 24-151[3] and 24-95[4], each of which amend Connecticut’s adult-use cannabis act, Conn. Gen. Stat. Chapter 420h of Title 21a, hereinafter referred to as the “Adult-Use Cannabis Act”. However, each of these Public Acts were passed by either the Connecticut Senate or the Connecticut House of Representatives on the same day, May 8, 2024. This has created confusion as to the validity and applicability of certain sections of each act. This advisory identifies the key elements of Public Acts- 24-76, 24-115, 24-151 and 24-95, including their operative dates, where they conflict in their amendments to the Adult-Use Cannabis Act and which amendments prevail over others.

Untangling Conflicting Amendments

The legislative process can be quite dynamic, with lawmakers striving to update and refine existing laws to keep pace with rapidly developing industries, such as the cannabis industry. However, this can sometimes lead to confusion when multiple amendments target the same statutory provision within a single legislative session. Conn. Gen. Stat. § 2-30b provides a framework for navigating such situations and specifically deals with situations where multiple amendments are made to the same law during a single legislative session.

Subsection (a) of 2-30b sets forth the guiding principle of the presumption of validity. When two or more acts are passed during the same session amend the same section of a statute, and neither act explicitly references the other, both amendments are presumed to be effective. However, subsection (a) also acknowledges the possibility of conflicting amendments and provides guidance on resolving such irreconcilable conflicts. If the amendments are irreconcilable, meaning they cannot coexist within the same legal framework, the statute establishes a clear hierarchy. The act that is passed last by the second house of the legislature prevails.

All four acts – Public Acts- 24-76, 24-115, 24-151 and 24-95 were passed on May 8, 2024, where Public Acts 24-76, 24-115 and 24-151 were last passed by the Senate and Public Act 24-95 was last passed by the House. Therefore, 2-30b is critical to understanding what controls, especially because all four acts amend certain sections, and sometimes the same sections, of the Adult-Use Cannabis Act.

Public Act 24-76

As noted in our previous advisory, PA 24-76 was signed into law by Governor Lamont on May 11, 2024, but does not become effective until July 1, 2024. PA 24-76 brought about significant changes to Connecticut’s cannabis laws, which included establishing a new category of THC product, an “infused beverage” for regulation, providing for the sale and inventory and potential sale of infused beverages already in possession by businesses, redefining the THC thresholds for high-THC hemp and moderate-THC hemp products, imposing packaging restrictions on infused beverages, limiting sales of infused beverages to those age 21 and above, and expanding local and state enforcement powers. Thus, while PA 24-76 amends the Adult-Use Cannabis Act, related to cannabis and hemp regulation, it does not directly change the core of the adult-use cannabis statute.

Public Act 24-95

On May 11, 2024, Governor Lamont signed PA 24-95, which repealed and replaced several sections of PA 24-76, specifically Section 2 of PA 24-95 repeals and replaces Section 29 of PA 24-76 (on passage), Section 3 repeals and replaces Section 30 of PA 24-76 (on passage) and Section 4 repeals and replaces Section 31 of PA 24-76 (effective, January 1, 2025).

The changes resulting from the passage of PA 24-95 include (1) establishing a task force to study the effects of allowing social equity applicants to partner with cultivators who may be located outside of disproportionately impacted areas (“DIAs”); (2) shortening the grace period in which businesses may sell legacy infused beverages from September 30, 2024 to July 1, 2024; and (3) allowing dispensary facilities, hybrid retailers, retailers, or the holder of a package store permit to apply for a waiver to sell legacy infused beverages for the period beginning July 1, 2024 and ending September 30, 2024.

The task force established by the Social Equity Council under PA 24-95 is required to report its findings on allowing social equity applicants to partner with cultivators outside of DIAs by January 1, 2025. Further developments may be forthcoming depending on the nature of these findings.

Under PA 24-76, a retailer in possession of reported legacy infused beverages could sell off their supply of legacy infused beverages between July 1, 2024, and September 30, 2024. PA-95 eliminated that transition period and instead provides that no business may sell legacy infused beverages on or after July 1, 2024.

Dispensary facilities, hybrid retailers, retailers, or the holders of a package store permit may apply for a waiver to sell legacy infused beverages during the period beginning on July 1, 2024, and ending on September 30, 2024. Waiver applications must be submitted to DCP by June 30, 2024. In addition, waivers will only be issued to those that complied with the inventory reporting requirements of PA 24-76 and PA 24-95. Inventory as of May 14, 2024, must have been accounted for and reported to DCP along with a fee of one dollar per beverage on or before June 15, 2024.

Cannabis facilities that have complied with the inventory reporting requirements and wish to sell their stock of legacy infused beverages must move quickly to comply with the upcoming waiver deadline of June 30, 2024.

Public Act 24-115

PA 24-115, which was signed into law by Governor Lamont on June 4, 2024, brought about further revisions to the cannabis regulatory scheme, including some that conflict with PA 24-76. As noted above, PA 24-76 was passed at 10:03 p.m., however, PA 24-115 was passed at 10:13 p.m., meaning PA 24-115 supersedes PA 24-76.

The changes brought by PA 24-115 include the following: (1) redefining definitions brought about by PA 24-76; (2) requiring the DCP Commissioner to classify any synthetic cannabinoid as a schedule I controlled substance; (3) prohibiting cannabis from containing any synthetic cannabinoid and prohibiting cannabis establishments from selling synthetic cannabinoid; and (4) modifying prohibitions on members of the Social Equity Council or DCP from holding certain interests in, or receiving funds from certain cannabis establishments.

Section 1 of PA 24-115 provides that the new definitions will be effective from passage. In addition, PA 24-76’s time distinction for the definition of a high-THC or moderate-THC hemp product was removed. While PA 24-76 contained separate definitions for the periods prior to and after October 1, 2024, PA 24-115 streamlines the definition to mean any hemp edible, hemp topical or hemp transdermal patch that exceeds one milligram on a per-serving basis, or five milligrams on a per-container basis. Any hemp tincture, including oil intended for ingestion, will be classified as a high-THC product if it exceeds one milligram on a per-serving basis or twenty-five milligrams on a per-container basis.

In addition, hemp concentrate or extract products such as vape oil, wax or shatter will be classified as high-THC if levels exceed twenty-five milligrams on a per-container basis. Finally, a manufactured hemp product will reach the high-threshold if THC exceeds one milligram on a per-serving basis, five milligrams on a per-container basis, or three-tenths percent on a dry-weight basis for cannabis flowers or trim.

Under PA 24-115, synthetic cannabinoids are defined as any substance converted by a chemical process to create a cannabinoid or cannabinoid-like substance that (i) has structural features which allow interaction with at least one of the known cannabinoid-specific receptors, or (ii) has any physiological or psychotropic response on at least one cannabinoid-specific receptor. Synthetic cannabinoids include hexahydrocannabinol (HHC and HXC) and hydrox4phc (PHC). Manufactured cannabinoids are not included in the synthetic cannabinoid definition. PA 24-115 requires the DCP Commissioner to classify synthetic cannabinoids as schedule I controlled substances.

PA 24-115 prohibits cannabis from including any synthetic cannabinoids and no synthetic cannabinoids may be sold at any cannabis establishment.

PA 24-115 also expanded the restrictions on Social Equity Council members from participating in or receiving a financial interest in cannabis activities. Specifically, members are prohibited from having any management or financial interest, either directly or indirectly, in the cultivation, manufacture, sale, transportation, delivery or testing of cannabis in the State of Connecticut. Council members are also prohibited from receiving any commission or profit from or having any financial interest in purchases or sales made by licensed cannabis establishments.

Finally, Section 8 of PA 24-115 undid PA 24-76’s changes to Conn. Gen. Stat. § 22-61m. Specifically, PA 24-76 had increased the penalty amounts for those operating without a license and other violations. In addition, PA 24-76 repealed Section 22-61m(z), which had stipulated that violations of manufacturer hemp provisions would be deemed an unfair or deceptive trade practice under Conn. Gen. Stat. § 42-110b(a). PA 24-115 returned the penalty amounts to their prior levels and reversed the repeal of Section 22-61m(z).

Public Act 24-151

PA 24-151 was signed by Governor Lamont on June 6, 2024, making it the last of the four public acts to be signed into law.

A key element of PA 24-151 is the way Section 138 is targeted towards helping certain social equity applicants in Connecticut’s cannabis industry. Specifically, it creates an easier final license for social equity applicants by allowing DCP to grant a final cultivator license to certain social equity applicants who have not yet met the minimum growing space requirement of 15,000 square feet. However, this relief is not perpetual, the act states that this relief is available only until December 31^st, 2025. Additionally, applicants must meet the following three requirements: (1) the applicant must have a provisional cultivator license and a facility with at least 5,000 square feet of growing space; (2) they must be compliant with cannabis regulations and have a detailed plan to reach the 15,000 square feet by the deadline, and (3) they must pay the required $3 million fee that goes towards social equity initiatives. While this legislation will certainly help social equity applicants, applying for this should be done strategically because there are certain penalties that might come into play. If the licensee does not meet the 15,000 square feet requirement by December 31, 2025, then they shall owe a daily fee of $500. Additionally, DCP has enforcement power and can take further disciplinary actions like license suspension or fines. Overall, Section 138 of PA 24-151 aims to give social equity applicants a temporary advantage and some breathing room to reach the required grow space requirement while still ensuring they are moving towards compliance.

Unlike the other acts, PA 24-151 contains only one conflict with PA 24-76 where they both amend Conn. Gen. Stat. § 21a-420d(k) of the Adult-Use Cannabis Act, which describes the responsibilities of the Social Equity Council established under the Adult-Use Cannabis Act. PA 24-151 was also passed by the Senate on May 8, 2024, specifically at 9:34 p.m., meaning it was passed before PA 24-76, which was passed at 10:03 p.m., therefore, PA 24-76’s amendment to the Adult-Use Cannabis Act controls.

Section 9 of PA 24-76 amends Conn. Gen. Stat. § 21a-420d(k) of the Adult-Use Cannabis Act, effective July 1, 2024, regarding the Social Equity Council and its role in approving cannabis business partnerships. The Social Equity Council will now be responsible for evaluating two key aspects of cannabis business applications. First, for equity joint ventures, where cannabis businesses team up with social equity applicants, the Social Equity Council will develop criteria to assess the ownership and control structure of these ventures, ensuring that such partnerships are genuine and to the benefit of social equity applicants. Second, with respect to social equity plans, cannabis establishments applying for a final license will need to submit a social equity plan outlining how they plan to promote social equity within the industry. Notably, certain safeguards will be implemented to prevent conflicts of interest. The Social Equity Council will not approve ventures where the same individual owns parts of multiple partnerships, unless the ownership roles are for separate ventures. Overall, this amendment strengthens the Social Equity Council’s role in ensuring genuine partnerships that benefit social equity applicants in Connecticut’s cannabis industry.

Conclusion

Overall, the Connecticut legislature has created various inconsistencies with respect to these four acts and how they amend the Adult-Use Cannabis Act. While we have untangled many of the effected sections in this advisory, it will ultimately be up to the Legislative Commissioner’s Office in Connecticut to officially resolve these conflicts.

The Cannabis Practice Group at Wiggin and Dana is a multidisciplinary team of attorneys across a variety of key practice areas in the firm, including regulatory compliance, which advises clients in the cannabis and cannabis-adjacent space, helping them navigate through the ever-changing and complex federal, state, and local regulations governing this vibrant and expanding industry.

[1] Signed on May 11, 2024

[2] Signed on June 4, 2024

[3] Signed on June 6, 2024

[4] Signed on May 11, 2024