Business of cannabis breakfast brings out business community
Norwich — The Eastern Connecticut Chamber of Commerce held its second "Business of Cannabis" breakfast Wednesday to explain the complexities of the new law legalizing recreational marijuana to the area's business community.
The discussion and mini business exposition at the Norwich Holiday Inn was only the second chamber event to take place in person this year. The first, in January, also was meant as an informational session for those interested in the cannabis industry in the region.
Curaleaf Groton and the Botanist of Montville, both medical dispensaries, took part in the expo, along with informational technology and security companies from Massachusetts.
Three speakers, including Connecticut Department of Consumer Protection Commissioner Michelle Seagull, Suisman & Shapiro attorney Kyle Zrenda and Kurt Smith, a cannabis facilities professional at Fuss & O'Neill Inc., took up most of Wednesday's event, which welcomed about 90 attendees.
The commissioner said the Social Equity Council has formed and is meeting. The 15-person council of state officials and social justice and civil rights professionals is meant to "oversee the verification of equity applicants, create new programs to support cannabis businesses and businesses in other industries, and manage the more general community investments derived from the cannabis tax revenue," according to the state's recreational cannabis webpage.
The state's medical marijuana industry began operating in 2012, and there are now 18 dispensaries in the state, all of which have the option to convert to hybrid and sell both medical and recreational cannabis, Seagull said.
"It's really important to us that we preserve the medical marketplace that currently does exist," she said. "It's important to us that that market, which is working well and helping a lot of people, doesn't get swallowed up."
Thames Valley Relief in Montville, which recently rebranded to The Botanist, and Curaleaf Groton are two local purveyors of medical cannabis trying to determine how to adjust to the new recreational market. Both are owned by larger companies that operate in multiple states.
Recreational cannabis dispensaries won't open until, at the earliest, May 2022. Existing medical cannabis businesses have to pay between $1 million and $3 million to enter the recreational market, depending on whether they partner with a social equity applicant. The equity applicant program was designed for those who live in areas that have been disproportionately impacted by the war on drugs, allowing them to have an easier and separate process to start a marijuana enterprise, rather than competing with corporations. In the region, New London, Groton and Norwich contain disproportionately impacted areas where certain residents would be considered equity applicants.
A way in
A portion of the discussion Wednesday focused on the varied ways people could be involved in the cannabis industry. Seagull said there are nine different license types, not just growing and selling product, such as manufacturing or packaging/labeling.
Smith, from Fuss & O'Neill Inc., a multistate company founded in Connecticut, served as an example. He described his role as a sales job for a civil engineering, landscape architecture and land surveying company. The company builds facilities for cultivators, for example. He said businesses in the region can join the marijuana industry even if they're not specifically cannabis companies. Such businesses have the benefit of not dealing with the complexities of the new law like cannabis companies have to.
Smith said a new cannabis industry will reach "all the businesses in this room." Human Resources, payroll, professional services, legal services, as well as other avenues, are there for businesses to take advantage of, he argued.
While 50% of licenses must go to social equity applicants, Seagull said the details of the lottery process for different license types still needs to be worked out by the Social Equity Council.
Seagull said Connecticut has learned from other states' successes and missteps, especially in social equity provisions and training for people who haven't been in this business before.
An attendee wondered how the state will make sure larger corporations don't exploit the provision allowing businesses to partner with equity applicants. Seagull said the Social Equity Council would vet any application to see whether it is a large corporation trying to circumvent the rules, or is this genuinely a social equity business. She said the council will "look at the corporate documents and understand who truly owns and operates these businesses to make sure they qualify."
Federal vs. local law
Attorney Zrenda's remarks focused on the new law's effects on employers and employees. He said it depends on the context whether an employer can fire an employee for cannabis use. Such mitigating factors include whether the use was for medical or recreation, where and when the marijuana was consumed and what the employee's industry is, among other factors. Marijuana is still illegal under federal law, complicating matters.
Still, Zrenda said, there's room for states to have different laws under the Controlled Substances Act. He brought up a 2017 court decision involving Bridebrook Nursing Home and Rehab Center in Niantic. The judge found that refusing to hire someone based on a drug test taken before they start the job violates state law.
"Unless required by federal law or because it will cause an employer to use federal funding, you can't take any adverse action against an employee for having a medical marijuana card," Zrenda said. "If you are under the influence at work or you use and possess at work, then an employer can take adverse action against an employee."
Zrenda ran through a list of employees who could face disciplinary action for using cannabis, including drivers, employees in jobs requiring OSHA certifications, caretakers of children or vulnerable persons, those whose jobs require national security clearance, and some workers who positions are federally funded.
"Nothing in the law prohibits drug testing, but in general, a positive drug test in and of itself can't be used to terminate someone unless what they did violates federal law or threatens federal funding, or if an employer suspects they've been using it at work," he said. "Also if there's a written policy that says a positive drug test can lead to termination. If your job doesn't fall into these exceptions and you're terminated for off-duty use of cannabis, there's private cause of action where an employee can be reinstated, and awarded back pay and legal costs."
Southeastern Connecticut legislators and other critics of the new law have claimed legalizing recreational marijuana would have an adverse effect on military contractors including Electric Boat. EB and other such companies testified against the bill earlier this year, saying, "Legalizing recreational cannabis will negatively impact our ability to meet our workforce development and workplace safety objectives." Legal experts including Zrenda and Devaughn Ward, a Connecticut lawyer and senior legislative counsel for the nonprofit Marijuana Policy Project, agree state law doesn't override federal laws regarding defense industry companies.
Chamber President Tony Sheridan said after the event that he's noticed a lot of people in the area eager to get into the cannabis business. He acknowledged that while the chamber is in favor of free market ideas, he agrees that the new industry needs to be well-regulated because of the effects of the failed war on drugs.