OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5329
AN ACT CONCERNING CANNABIS.
As Amended by House "A" (LCO 5358)
House Calendar No.: 183
Primary Analyst: ME 4/27/22
Contributing Analyst(s):
Reviewer: PR
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 22$ FY 23$ FY 24$
Resources of the
General Fund
GF - Revenue
Loss
None None 5.3 million
Resources of the
General Fund
GF - Revenue
Impact
See Below See Below See Below
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 22$ FY 23$ FY 24$
Various
Municipalities
Potential
Revenue
Gain
See Below See Below See Below
Explanation
The bill makes various changes regarding the regulation and
licensing of adult use cannabis resulting in various revenue impacts to
the state and a potential revenue gain to municipalities.
Sections 2-4 prohibit the gifting of cannabis in certain situations
resulting in the potential revenue gain to the General Fund and
municipalities to the extent violations occur, described below:
• Section 2 allows the Commissioner of Emergency Services and
Public Protection to administer a fine of $1,000 per offense
resulting in a potential revenue gain to the General Fund to 2022HB-05329-R01-FN.DOCX Page 2 of 3
the extent violations occur.
• Section 2 also results in a potential minimal revenue gain to
the General Fund beginning in FY 23 to the extent the
Department of Revenue Services hold administrative hearings
regarding potential violations and levies associated penalties
(which are up to $1,000 per violation under the bill).
• Section 3 of the bill allows municipalities to levy fines of up to
$1,000 per violation against anyone that violates the bill’s
prohibition on marijuana donations or giveaways. This results
in a revenue gain to municipalities that will vary based on the
number of fines issued, but is anticipated to be minimal.
Sections 5-8 result in a potential revenue gain by establishing a
deadline for certain producers or dispensaries to create equity joint
ventures necessary to maintain eligibility for a reduced conversion fee.
If a producer or dispensary misses the 14-month deadline outlined
under the bill, then the entity would be required to pay the difference
between the full fee and the reduced rate.
The full fee amount is $3 million for producers and $1 million for
dispensary facilities. The reduced fee amount is $1.5 million for
producers and $500,000 for dispensaries.
The bill also results in a potential revenue loss in fee revenue by
limiting the various applicable licensing fees of equity joint ventures to
50% of any applicable fee for the first three renewal cycles.
Section 10 removes the cap on cannabis retailers or micro cultivators
in each municipality. To the extent that this increases the volume of sales
of cannabis in a given municipality, there is a revenue gain via the
Municipal Cannabis Tax that would vary based on the amount sold.
Section 11 creates a hemp working group resulting in no fiscal impact
to the state. This section has no fiscal impact as PA 17-236 prohibits
transportation allowances for working group members. 2022HB-05329-R01-FN.DOCX Page 3 of 3
Section 505 and 507 remove the fees for a medical marijuana license
beginning July 1, 2023 resulting in an annual revenue loss to the state of
approximately $5.3 million beginning in FY 24.
House "A" made various changes to cannabis related statutes
resulting in the revenue impacts described below.
• Reduced the fine for gifting cannabis from $2,500 to $1,000
resulting in a reduction in the potential revenue gain to the
state and municipalities described above.
• Changed the effective date to effective from passage in section
2 and 3 resulting in a potential revenue gain to the state and
municipalities in FY 22 to the extent fines are administered.
• Removed the fees for a medical marijuana license beginning
July 1, 2023 resulting in an annual revenue loss to the state of
approximately $5.3 million beginning in FY 24.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the number of violations and the
number of cannabis licenses impacted by the provisions of the bill.