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OLR Bill Analysis
sHB 6099
AN ACT CONCERNING ANTITRUST ISSUES AND THE
PALLIATIVE USE OF MARIJUANA AND THE SALE OF HEMP AND
HEMP PRODUCTS.
SUMMARY
This bill requires anyone involved in a transaction that results in a
material change to a medical marijuana business to file written notice
with the attorney general. It also establishes a waiting period for these
transactions.
Under the bill, the written notice must contain information relevant
to the proposed transaction as the attorney general deems necessary to
enable him to determine whether the transaction would violate
antitrust laws. The attorney general may ask for supplemental
information and extend the waiting period. The bill prohibits
disclosing this information under the state’s antitrust law and exempts
it from disclosure under the Freedom of Information Act (FOIA).
Additionally, the bill allows licensed marijuana producers to
manufacture, market, produce, or store hemp and hemp products and
obtain these products from other legal sources. It also requires these
products the producer purchases to be tracked throughout the
manufacturing process.
Finally, the bill (1) prohibits hemp or hemp products from being
sold or distributed within a medical marijuana dispensary and (2)
requires the independent testing laboratory that tests hemp to be
located in Connecticut. By law, hemp that is intended to be
manufactured into a manufacturer hemp product must be tested by an
independent testing laboratory. “Manufacturer hemp products”
include products intended for human consumption, including by
ingestion, inhalation, or absorption, that contain a THC concentration
of no more than 0.3% on a dry weight basis or per volume or weight. 2021HB-06099-R000102-BA.DOCX
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EFFECTIVE DATE: July 1, 2021
MEDICAL MARIJUANA BU SINESS TRANSACTION N OTICE AND
WAITING PERIOD
The bill requires any person who enters into a transaction, either
directly or indirectly, that results in a material change to a medical
marijuana business to file a written notice with the attorney general
and serve a waiting period. A “person” means an individual, firm,
partnership, corporation, company, association, trust, other business,
or tribal entity and a “medical marijuana business” means a licensed
medical marijuana dispensary or production facility.
Under the bill, “material change” means:
1. the addition of a dispensary facility backer or producer backer (i.e.,
an owner of a greater than 5% stake);
2. a change in the ownership interest of an existing dispensary
facility backer or producer backer;
3. the merger, consolidation, or other affiliation of a medical
marijuana business with another person;
4. the acquisition of all or part of a medical marijuana business by
another person; and
5. the transfer of assets or security interests from a medical marijuana
business to another person.
“Transfer” means to sell, transfer, lease, exchange, option, convey,
give, otherwise dispose of, or transfer control over, including by way
of merger or joint venture not in the ordinary course of business.
Written Notice
The bill requires the written notice to be in a form and contain the
documentary material and information relevant to the proposed
transaction as the attorney general deems necessary and appropriate to
enable him to determine whether the transaction, if consummated,
violates antitrust laws. 2021HB-06099-R000102-BA.DOCX
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By law, the attorney general has the authority to, among other
things, investigate proposed transactions and require parties to
provide relevant information through subpoenas and written
interrogatories (CGS § 35-42).
Waiting Period
The bill requires a waiting period before the transaction is complete,
which begins on the day the attorney general receives the completed
notice from all parties to the transaction (see above). The waiting
period generally ends on the 30
th
day after the receipt, unless the
attorney general extends the time or, in individual cases, terminates
the waiting period and allows the transaction to proceed.
Under the bill, the attorney general may, before the 30-day waiting
period expires, extend the waiting period by requesting additional
material. He may require parties to submit, pursuant to a subpoena or
voluntarily, additional information or documentary material relevant
to the proposed transaction. Upon this request, the waiting period is
extended until 30 days after the parties have substantially complied
with the request, as determined by the attorney general.
Disclosure Prohibited
Under the bill, any information or documentary material filed with
the attorney general is not disclosable under the Connecticut antitrust
investigation law or FOIA. This information or material must not be
made public, except as may be relevant to an administrative or judicial
action or proceeding.
The bill requires the information or documentary material to be
returned to the person who provided it when the attorney general’s
review is terminated or the final determination of any action or
proceeding commenced as a result.
HEMP
The bill requires any licensed marijuana producer that
manufactures, markets, produces, or stores hemp and hemp products
to do so in accordance with existing hemp laws and regulations. The 2021HB-06099-R000102-BA.DOCX
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bill also allows producers to obtain hemp and hemp products from a
person authorized under Connecticut law or the law of another U.S.
state, territory, or possession or other sovereign entity to possess and
sell these products.
Under the bill, the Seed Law Chapter and its regulations do not
apply to medical marijuana producers, broadening an existing
provision generally exempting producers from laws on hemp licensure
and programs. The Seed La w Chapter generally establishes
requirements for seed labeling, sale, inspection, and restrictions,
among other things (CGS § 22-55 et seq.).
The bill requires the hemp or hemp products a marijuana producer
purchases from a third parties to be tracked as a separate batch
throughout the manufacturing process to document their disposition.
Once the producer receives these products, they are deemed marijuana
and the producer must comply with the applicable marijuana laws and
statutes. Producers must retain a copy of the certificate of analysis for
hemp or hemp products purchased and the invoice and transport
documents that show the quantity purchased and date received.
COMMITTEE ACTION
General Law Committee
Joint Favorable Substitute
Yea 19 Nay 0 (03/09/2021)