OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5150
AN ACT CONCERNING CANNABIS AND HEMP REGULATION.
AMENDMENT
LCO No.: 4211
File Copy No.: 199
House Calendar No.: 152
Primary Analyst: ME 4/23/24
Contributing Analyst(s): LG, MM, JP, EW (FN)
OFA Fiscal Note
See Fiscal Note Details
The amendment strikes the underlying bill and its associated fiscal
impact resulting in the following impacts described below.
Section 5 results in a potential revenue gain to various funds and
accounts by:
(1) allowing social equity applicants for a cultivator license to apply
instead for a provisional micro-cultivator license. The bill requires
the applicant to pay a $500,000 application fee that shall be
deposited into the consumer protection enforcement account.
1
(2) requiring a renewal fee for the final micro-cultivator license to be
$1,000 and to be deposited into the General Fund (this is the same
as existing law for this fee).
(3) requiring social equity applicants seeking to operate an equity
joint venture to (1) obtain a micro-cultivator license, (2) commence
cultivation activities under such micro-cultivator license and (3)
pay a fee of $500,000 which is to be deposited into the Cannabis
1
Per section 21a-8a of the Connecticut General Statutes, the consumer protection
enforcement account is a non-lapsing account to be used by the Department of
Consumer Protection to fund positions and other related expenses for the enforcement
of licensing and registration laws. 2024HB-05150-R00LCO04211-FNA.DOCX Page 2 of 4
Social Equity and Innovation Fund.
As this provision generally provides expanded access for qualified
social equity applicants to develop businesses, it is anticipated that more
businesses may apply and pay the fees for licensure as permitted under
the amendment. The actual revenue gain will be dependent upon the
number of qualified applicants and the type of licensure they are
seeking.
Based on information from the Department of Consumer Protection
and Social Equity Council (SEC), as of March 2024 there are currently 13
cultivator licensees (1 active; 12 provisional) and 6 micro-cultivators (1
active; 5 provisional).
Section 6, 7, 16, and 25 allows the sale of infused beverages and of
seedlings
2
by a micro-cultivator resulting in a potential cost to the
Department of Consumer Protection (DCP) and the State Comptroller.
To the extent the sale of infused beverages and seedlings generates a
significant number of complaints which result in investigations, DCP
may have to hire up to three additional positions
3
for a salary and other
expenses cost of $394,000 per year, along with associated fringe benefit
costs of $121,000 per year.
Section 25 increases fines regarding manufacturer licenses resulting
in a potential revenue gain to the state to the extent violations occur and
fines are assessed.
These sections also expands CUTPA enforcement by the Office of the
Attorney General (OAG) to include the unauthorized sale of (cannabis)
infused beverages. It is anticipated that the OAG could require at least
one Assistant Attorney General and one Investigator position as a result.
The total annualized cost of these positions in FY 25 would be less than
2
Currently, no live cannabis or hemp plants are permitted for retail sale in the state
which results in additional oversight for DCP. Violations will require swift inspections
to ensure product safety.
3
The positions include a drug control agent, program manager, and staff attorney 2024HB-05150-R00LCO04211-FNA.DOCX Page 3 of 4
$212,000.
These sections also result in a potential state and municipal tax
revenue gain by allowing the sale of cannabis seedlings. The bill limits
sales to only micro-cultivator establishments. The revenue gain is
therefore anticipated to be less than $100,000 annually for the state and
less than $50,000 annually for various municipalities in total from
applicable state and local taxes.
Sections 8 and 31 creates a fee of one dollar for each infused beverage
container or legacy infused beverage container sold for wholesaler
permits, dispensary facility, hybrid retailer, or retailer resulting in a
revenue gain to the consumer protection enforcement account
dependent on how many infused beverages are sold.
Section 10 allow municipalities to (1) prohibit certain businesses
from operating, and (2) apply for a court order to remove certain
merchandise from stores that violate provisions related to the delivery
of cannabis, medical marijuana, or hemp. These sections also permit (1)
civil fines up to $30,000 for each violation committed, and (2) civil fines
up to $10,000 for anyone who knowingly makes commercial areas
available for use in these violations. This results in a potential cost to
municipalities beginning in FY 25 for legal costs. This potential cost may
offset by a potential revenue gain to municipalities for the collection of
civil fines. The civil fines collected are first paid to the municipality to
reimburse for legal costs. Half of the remainder is then paid to the
municipality.
Section 10 also results in a potential revenue gain to the state to the
extent civil penalties are imposed.
4
Section 12 and 20 allows a product packager to expand its authorized
activities to include a product manufacturer if certain conditions are met
and a $30,000 application fee is paid resulting in a potential revenue gain
4
Income from civil penalties must first be paid to the municipality to reimburse it for
the costs of instituting the action. If there is a remainder, half is paid to the municipality
and half is paid to the state treasurer to deposit into the General Fund. 2024HB-05150-R00LCO04211-FNA.DOCX Page 4 of 4
to the state to the extent these applications are received. There are
currently seven provisional product manufacturer licenses issued and
seven provisional product packager licenses issued in the state.
Section 27-28 creates certificate of registration for a moderate-THC
hemp product vendor that has a $2,000 application and annual renewal
fee resulting in a potential revenue gain to the consumer protection
enforcement account. This section also allows DCP to impose a civil
penalty of up to $5,000 for violations resulting in a potential revenue
gain to the consumer protection enforcement account to the extent
violations occur.
Section 29 creates an infused beverage endorsement for package
store permittees for an annual fee of $500 resulting in a potential
revenue gain to the consumer protection enforcement account to the
extent the endorsement is applied for. In FY 23 there were 1,352 package
store permits in the state.
Section 32 allows the consumer protection enforcement account to
reimburse the OAG for certain enforcement expenses resulting in a cost
to the account and a savings to the OAG.
This amendment also make various minor and technical cannabis
related changes resulting in no fiscal impact to the state or
municipalities.
The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely
for the purposes of information, summarization and explanation and does not represent the intent of the General
Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of
informational sources, including the analyst’s professional knowledge. Whenever applicable, agency data is
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.