Publications

This client alert discusses the most recent changes to Connecticut cannabis laws brought about by the passage of Public Act No. 24-76 (the “Act”), which was signed by Governor Lamont on May 11, 2024.[1] These changes include the following: (1) establishing a new category of THC product, an “infused beverage” for regulation; (2) providing for the inventory and potential sale of infused beverages already in possession by businesses; (3) redefining the THC thresholds for high-THC hemp and moderate-THC hemp products; (4) imposing packaging restrictions on infused beverages and limits sales to those age 21 and above; (5) expanding local and state level enforcement powers, including making the unauthorized sale of infused beverages a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”); and (6) revising the definition of “disproportionately impacted area” for purposes of social equity applications.

Regulations covering infused beverages are set to take effect on October 1, 2024. On that date, no business other than a dispensary facility, hybrid retailer, retailer or package store may store, sell, or possess infused beverages for sale. An infused beverage has been codified as “a beverage that (A) is not an alcoholic beverage … (B) is intended for human consumption, and (C) contains, or is advertised, labeled or offered for sale as containing, total THC … that is not greater than three milligrams per container.” Sales of infused beverages in a container holding less than twelve fluid ounces, or any packaging comprising more than four containers are prohibited.

Importantly, operators possessing infused beverages that are not a package store, hybrid retailer, retailer, or dispensary facility are required to take an inventory of all infused beverages as of May 14, 2024. These operators must submit the results of this inventory and pay a fee in the amount of one dollar per container. Fees and inventory results are to be reported by June 15, 2024. Operators may continue to sell the infused beverages in their possession until June 30, 2024, and may apply to the Department of Consumer Protection (“DCP”) for a waiver to continue selling from July 1, 2024 until September 30, 2024. Only those infused beverages in inventory as of May 14, 2024 are eligible for sale.

Those seeking to sell infused beverages after October 1, 2024 will be required to obtain licensure from DCP. The license fee is $5,000 and is valid for one year. License holders are eligible to submit renewal applications for subsequent one year periods. Anyone selling without a license will be subject to a $5,000 civil penalty.

A license exemption was created for cultivators, micro-cultivators, food and beverage manufacturers, product manufacturers, or producer license holders who have received expanded authorization to engage in the adult use cannabis market. Members of these categories operating under a producer’s license may manufacture infused beverages beginning October 1, 2024 upon written request and approval from DCP.

Section 1 of the Act establishes new criteria for a high-THC hemp product at one milligram per serving or five milligrams per container. Such products may only be sold by licensed establishments and only to those age 21 and above.

Section 31 of the Act defines a Moderate-THC hemp product as a manufactured hemp product that has total THC of not less than one-half of one milligram and not more than five milligrams on a per container basis. This definition does not include infused beverages. Effective January 1, 2025, no person may sell any moderate-THC hemp products in state without holding a certificate of registration issued by DCP or otherwise qualifying as a cannabis establishment. The certificate application fee is $2,000.

The changes to THC level regulations may require business owners to reevaluate their product offerings. Current packaging schemes may also need to be altered in the wake of this new legislation given the per-serving and per-container restrictions.

Most significantly from an enforcement standpoint, the new legislation now deems a violation of the law controlling the selling, offering, or delivering of cannabis to be a CUTPA violation. Specifically, the law brings the unauthorized sale of cannabis infused beverages under the auspices of CUTPA.

DCP is the primary administrator of CUTPA. The Attorney General’s Office may take enforcement action at the request of the Commissioner of DCP. In addition, CUTPA allows for private actions by both individuals and businesses. The Superior Court at the request of the Attorney General’s Office may impose civil penalties in the amount up to $5,000 per willful violation, and up to $25,000 for the violation of a restraining order, as well as ordering restitution and injunctive relief. Private litigants may seek injunctive relief, compensatory and punitive damages, and reasonable attorneys’ fees, and, under certain circumstances, cases may proceed as class actions.

Local municipalities are also granted additional authority under the new law. Municipalities may, by legislative vote, prohibit a non-conforming business from operating within the municipality. Municipalities may also apply for a court order directing local law enforcement officials to seize certain merchandise and proceeds from stores that violate the cannabis or medical marijuana laws. Significantly, these orders can be issued without a hearing. In addition, any violation of the cannabis law will be deemed an unfair or deceptive trade practice under CUTPA.

In addition, anyone who aids or abets these violations can be subject to a $30,000 civil fine for each violation. Each day of the violation is a separate offense. Property owners are also subject to civil penalty with a fine of $10,000 imposed for those who knowingly make a space available for a use in violation of the cannabis regulatory scheme.

Finally, Section 13 of the Act expands the scope of the disproportionately impacted area definition for purposes of determining eligibility for social equity applications to include tribal reservation land and other land owned in fee simple by any indigenous tribe recognized by the state. This expanded definition will potentially allow for a wider pool of social equity applicants who can obtain such benefits as reduced fees and a path to licensure outside of the lottery system.

The heightened enforcement mechanisms and overall changes will have a significant impact on the evolving cannabis and hemp industry in the state of Connecticut. Business owners already engaged in the industry, as well as those contemplating entry into the market should carefully consider these developments. The regulatory landscape is likely to continue to shift in coming years.

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] Please note that Public Act No. 24-115, which addresses substantially same subject matter as Public Act No. 24-76, was also passed during this session of the General Assembly. However, as of the date of the issuance of this advisory, Public Act No. 24-115 has not been signed by the Governor. Should both Public Acts be adopted, we shall endeavor to identify any irreconcilable differences between the two Public Acts in a subsequent advisory.