At least some of Connecticut’s 38 social equity marijuana licenseholders are pushing state legislators to revise state law to allow them to cash out and walk away from the industry in three years instead of the original seven-year ownership requirement that was written into regulations.
Several of the 38 – which entered into “equity joint ventures” with financiers to get their businesses operational – want permission to sell their majority stakes to the minority owners, the CT Mirror reported, and lawmakers are weighing that with House Bill 7178.
But the measure’s fate is still unclear.
“Seven years is a very long time in any industry, and much can change. If a venture isn’t doing well, seven years is a significant length of time for a person to be locked into an operation that is struggling,” social equity licenseholder Derrick Gibbs told lawmakers during a committee hearing.
“On the flip side, if a business is doing well, why should a social equity owner be prohibited from choosing to cash out at a time most advantageous financially?” Gibbs said, the Mirror reported.
Another licenseholder noted that non-equity companies aren’t barred from selling their ownership stakes the way social equity entrepreneurs are, which he said is a basic question of fairness.
Some lawmakers were hesitant to make such an adjustment, however, and argued it could lead to exactly what they were trying to prevent with the social equity program: market dominance by large multistate operators instead of a thriving small business community.
“What is the product you end up with after just three years? Is it more corporately controlled and less of the community-owned, community-supported ventures across the state?” state Rep. Roland Lemar said. “I am really worried about this.”
The bill, introduced in March, has yet to face a full vote of either the state House of Representatives or Senate.
[[{“value”:”The law currently mandates social equity owners cannot sell to minority owners for seven years.
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