Connecticut’s appointed council regulating equitable growth in the state’s new cannabis industry has dealt a setback to an up-and-coming cannabis company with an outlet in Stamford.
Fine Fettle, which operates four stores in Connecticut and two in Massachusetts, was stripped of five previously approved equity joint venture licenses by state’s Social Equity Council at the group’s March 7 meeting. Equity joint ventures are cannabis businesses that are co-owned by established companies and individuals from areas disproportionately impacted by the criminalization of marijuana during the war on drugs.
The state’s equity programs are intended to benefit people who live in these communities, which are determined by unemployment and drug conviction rates, with half of all new licenses for new cannabis businesses reserved for them. Recipients pay reduced license fees for three cycles after being established.
State officials awarded Fine Fettle six of the 14-month provisional licenses last September. In February, the company opened the state’s first equity joint venture — a recreational dispensary in Manchester. But it was the other five licenses, which were not yet in use, where officials said they found fault. While there were preliminary plans to space the five new dispensaries across their existing locations, specific sites had not yet been finalized.
Besides Manchester, Fine Fettle also operates hybrid dispensaries in Stamford, Newington and Willimantic. The three businesses are not equity joint ventures and were not immediately affected by the council’s decision.
Kristina Diamond, spokesperson for the Social Equity Council, said Fine Fettle failed to comply with an amendment to the state’s cannabis law that prohibits equity partners from owning more than one equity joint venture. Legislators approved the change in May 2022.
Fine Fettle had submitted its six applications for equity joint venture licenses before the law was changed, company executive Benjamin Zachs told the Stamford Advocate. Before the amendment, the original law — which took effect in July 2021 — did not place limits on individuals owning multiple equity joint ventures.
All of Fine Fettle’s equity applications had the same three owners — people who Zachs said that company founders had known for “a minimum of 25 years.” The goal was to divvy up ownership stakes across multiple businesses in order to ensure success would be equal for all three partners.
“What this is doing is … we need to find three new social equity partners and our social equity partners can now only own a piece of one license versus owning a piece of six,” Zachs said. “Our view has always been: ‘Hey, owning less of more is better than owning more of less.’ Because we’ve opened one. Who knows if and when and how successful the additional ones are going to be?”
Diamond declined to comment Wednesday on how Fine Fettle’s applications were approved after the law was changed to disallow ownership by equity partners across multiple ventures. The Social Equity Council’s September and March meeting materials are not available on the state’s website.
“In regards to Fine Fettle, considering that the revised applications are still under review, our office will not make any further comments until the review is complete and the council issues a final decision,” Diamond said in an email.
Zachs said that he is proud of the work Connecticut has done to support equitable growth in the new cannabis industry. But he said it’s been a frustrating process, particularly for the company’s three partners, who he said declined to talk Wednesday.
“It definitely impacts ownership for our partners, which is really a bummer because the law of these (equity joint ventures) is supposed to help,” Zachs said.
