AN ACT CONCERNING THE SOCIAL EQUITY COUNCIL'S RECOMMENDATIONS REGARDING CANNABIS REGULATION.

House of Representatives
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General Assembly File No. 386
February Session, 2026 Substitute House Bill No. 5351

House of Representatives, April 2, 2026

The Committee on General Law reported through REP. LEMAR
of the 96th Dist., Chairperson of the Committee on the part of
the House, that the substitute bill ought to pass.

AN ACT CONCERNING THE SOCIAL EQUITY COUNCIL'S
RECOMMENDATIONS REGARDING CANNABIS REGULATION.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 21a -420d of the 2026 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective from passage): 3
(a) There is established a Social Equity Council, which shall be within 4
the Department of Economic and Community Development for 5
administrative purposes only. 6
(b) The Social Equity Council shall consist of seventeen members as 7
follows: 8
(1) One appointed by the speaker of the House of Representatives, 9
who has a professional background of not less than five years working 10
in the field of either social justice or civil rights; 11
(2) One appointed by the president pro tempore of the Senate, who 12
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has a professional background of not less than five years working in the 13
field of either social justice or civil rights; 14
(3) One appointed by the majority leader of the House of 15
Representatives, who has a professional background of not less than five 16
years working in the field of economic development to help minority -17
owned businesses; 18
(4) One appointed by the majority leader of the Senate, who has a 19
professional background of not less than five years in providing access 20
to capital to minorities, as defined in section 32-9n; 21
(5) One appointed by the minority leader of the House of 22
Representatives, who is from a community that has been 23
disproportionately harmed by cannabis prohibition and enforcement; 24
(6) One appointed by the minority leader of the Senate, who has a 25
professional background of not less than five years in providing access 26
to capital to minorities, as defined in section 32-9n; 27
(7) Two appointed by the chairperson of the Black and Puerto Rican 28
Caucus of the General Assembly, one of whom shall be designated by 29
the chairperson of the Black Caucus of the General Assembly and one of 30
whom shall be designated by the chairperson of the Puerto Rican and 31
Latino Caucus of the General Assembly; 32
(8) Five appointed by the Governor, one who is from a community 33
that has been disproportionately harmed by cannabis prohibition and 34
enforcement, one who has a professional background of not less than 35
five years working in the field of economic development and one who 36
is an executive branch official focused on workforce development; 37
(9) The Commissioner of Consumer Protection, or the commissioner's 38
designee; 39
(10) The Commissioner of Economic and Community Development, 40
or the commissioner's designee; 41
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(11) The State Treasurer, or the State Treasurer's designee; and 42
(12) The Secretary of the Office of Policy and Management, or the 43
secretary's designee. 44
(c) (1) In making the appointments in subsection (b) of this section, 45
the appointing authority shall use best efforts to make appointments 46
that reflect the racial, gender and geographic diversity of the population 47
of the state. 48
(2) Members appointed by the Governor shall serve a term of four 49
years from the time of appointment and members appointed by any 50
other appointing authority shall serve a term of three years from the 51
time of appointment. The appointing authority shall fill any vacancy for 52
the unexpired term. 53
(3) (A) The Governor shall appoint an interim executive director to 54
operationalize and support the Social Equity Council until, 55
notwithstanding the provisions of section 4 -9a, the council appoints an 56
executive director. Subject to the provisions of chapter 67, and within 57
available appropriations, the council may thereafter appoint an 58
executive director and such other employees as may be necessary for the 59
discharge of the duties of the council. 60
(B) Not later than July 1, 2024, the council shall adopt bylaws 61
specifying which duties are retained by the members of the council and 62
which duties are delegated to the executive director. 63
(C) The council may, by a simple majority vote of the members of the 64
council, take any formal personnel action concerning the executive 65
director for any reason. 66
(D) In addition to the council's authority under subparagraph (C) of 67
this subdivision, if a final review board consisting of the chairperson 68
and the members of the council appointed under subdivisions (1), (2), 69
(5) and (6) of subsection (b) of this section determines, by a simple 70
majority vote of the members of the final review board, that removing 71
the executive director is in the best interest of serving the council's 72
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mission, such final review board shall issue a letter to the council 73
recommending that the council remove the executive director. 74
(4) The Governor shall appoint the chairperson of the council from 75
among the members of the council. The chairperson shall directly 76
supervise, establish annual goals for and conduct an annual 77
performance review of the executive director. 78
(5) The chairperson and executive director shall jointly develop, and 79
the council shall review and approve, (A) allocations of moneys in the 80
social equity and innovation account established under section 21a-420f, 81
for the purposes that the council determines under subsection (a) of 82
section 21a-420f, further the principles of equity, and (B) any plans for 83
expenditures to provide (i) access to capital for businesses, (ii) technical 84
assistance for the start -up and operation of a business, (iii) funding for 85
workforce education, (iv) funding for community investments, and (v) 86
funding for investments in disproportionately impacted areas. 87
(d) A majority of the members of the Social Equity Council shall 88
constitute a quorum for the transaction of any business. The members 89
of the council shall serve without compensation, but shall, within 90
available appropriations, be reimbursed for expenses necessarily 91
incurred in the performance of their duties. Any member who fails to 92
attend three consecutive meetings, or who fails to attend fifty per cent 93
of all meetings held during any calendar year, may be removed from 94
office by a simple majority vote of the members of the council. The 95
appointing authority shall fill the vacancy for the unexpired term of any 96
member who is removed from office under this subsection, and shall 97
use best efforts to ensure such appointment reflects the racial, gender 98
and geographic diversity of the population of the state. 99
(e) The Social Equity Council may (1) request, and shall receive, from 100
any state agency such information and assistance as the council may 101
require, (2) use such funds as may be available from federal, state or 102
other sources [and may] to carry out its purposes, (3) enter into contracts 103
or agreements to carry out [the] its purposes, [of the council,] including, 104
but not limited to, contracts or agreements with Connecticut 105
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Innovations, Incorporated, constituent units of the state system of 106
higher education, regional workforce development boards and 107
community development financial institutions, [(3)] (4) utilize such 108
voluntary and uncompensated services of private individuals, state or 109
federal agencies and organizations as may, from time to time, be offered 110
and needed, [(4)] (5) accept any gift, donation or bequest for the purpose 111
of performing [the] its duties, [of the council, (5) ] (6) conduct such 112
investigations as the council may deem necessary to carry out its duties, 113
(7) hold public hearings, [(6)] (8) establish [such] standing committees, 114
as necessary, to perform [the] its duties, [of the council, ] and [(7)] (9) 115
adopt such regulations, in accordance with the provisions of chapter 54, 116
as the council may deem necessary to carry out [the] its duties. [of the 117
council.] 118
(f) The Social Equity Council shall promote and encourage full 119
participation in the cannabis industry by persons from communities 120
that have been disproportionately harmed by cannabis prohibition and 121
enforcement. 122
(g) Not later than forty-five days after June 22, 2021, or at a later date 123
determined by the Social Equity Council, the council shall establish 124
criteria for proposals to conduct a study under this section and the 125
Secretary of the Office of Policy and Management shall post on the State 126
Contracting Portal a request for proposals to conduct a study, and shall 127
select an independent third party to conduct such study and provide 128
detailed findings of fact regarding the following matters in the state or 129
other matters determined by the council: 130
(1) Historical and present -day social, economic and familial 131
consequences of cannabis prohibition, the criminalization and 132
stigmatization of cannabis use and related public policies; 133
(2) Historical and present -day structures, patterns, causes and 134
consequences of intentional and unintentional racial discrimination and 135
racial disparities in the development, application and enforcement of 136
cannabis prohibition and related public policies; 137
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(3) Foreseeable long-term social, economic and familial consequences 138
of unremedied past racial discrimination and disparities arising from 139
past and continued cannabis prohibition, stigmatization and 140
criminalization; 141
(4) Existing patterns of racial discrimination and racial disparities in 142
access to entrepreneurship, employment and other economic benefits 143
arising in the lawful palliative use cannabis sector as established 144
pursuant to chapter 420f; and 145
(5) Any other matters that the council deems relevant and feasible for 146
study for the purpose of making reasonable and practical 147
recommendations for the establishment of an equitable and lawful 148
adult-use cannabis business sector in this state. 149
(h) Not later than January 1, 2022, the Social Equity Council shall, 150
taking into account the results of the study conducted in accordance 151
with subsection (g) of this section, make written recommendations, in 152
accordance with the provisions of section 11-4a, to the Governor and the 153
joint standing committees of the General Assembly having cognizance 154
of matters relating to finance, revenue and bonding, consumer 155
protection and the judiciary regarding legislation to implement the 156
provisions of this section. The council shall make recommendations 157
regarding: 158
(1) Creating programs to ensure that individuals from communities 159
that have been disproportionately harmed by cannabis prohibition and 160
enforcement are provided equal access to licenses for cannabis 161
establishments; 162
(2) Specifying additional qualifications for social equity applicants; 163
(3) Providing for expedited or priority license processing for each 164
license as a retailer, hybrid retailer, cultivator, micro-cultivator, product 165
manufacturer, food and beverage manufacturer, product packager, 166
transporter and delivery service license for social equity applicants; 167
(4) Establishing minimum criteria for any cannabis establishment 168
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licensed on or after January 1, 2022, to comply with an approved 169
workforce development plan to reinvest or provide employment and 170
training opportunities for individuals in disproportionately impacted 171
areas; 172
(5) Establishing criteria for a social equity plan for any cannabis 173
establishment licensed on or after January 1, 2022, to further the 174
principles of equity; 175
(6) Recruiting individuals from communities that have been 176
disproportionately harmed by cannabis prohibition and enforcement to 177
enroll in the workforce training program established pursuant to section 178
21a-421g; 179
(7) Potential uses for revenue generated under RERACA to further 180
equity; 181
(8) Encouraging participation of investors, cannabis establishments 182
and entrepreneurs in the cannabis business accelerator program 183
established pursuant to section 21a-421f; 184
(9) Establishing a process to best ensure that social equity applicants 185
have access to the capital and training needed to own and operate a 186
cannabis establishment; and 187
(10) Developing a vendor list of women-owned and minority-owned 188
businesses that cannabis establishments may contract with for necessary 189
services, including, but not limited to, office supplies, information 190
technology infrastructure and cleaning services. 191
(i) (1) Not later than August 1, 2021, and annually thereafter until July 192
31, 2023, the Social Equity Council shall use the most recent five -year 193
United States Census Bureau American Community Survey estimates 194
or any successor data to determine one or more United States census 195
tracts in the state that are a disproportionately impacted area and shall 196
publish a list of such tracts on the council's Internet web site. 197
(2) Not later than August 1, 2023, the council shall use poverty rate 198
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data from the most recent five -year United States Census Bureau 199
American Community Survey estimates, population data from the most 200
recent decennial census and conviction information from databases 201
managed by the Department of Emergency Services and Public 202
Protection to identify all United States census tracts in the state that are 203
disproportionately impacted areas and shall publish a list of such tracts 204
on the council's Internet web site. In identifying which census tracts in 205
this state are disproportionately impacted areas and preparing such list, 206
the council shall: 207
(A) Not deem any census tract with a poverty rate that is less than the 208
state-wide poverty rate to be a disproportionately impacted area; 209
(B) After eliminating the census tracts described in subparagraph (A) 210
of this subdivision, rank the remaining census tracts in order from the 211
census tract with the greatest historical conviction rate for drug-related 212
offenses to the census tract with the lowest historical conviction rate for 213
drug-related offenses; and 214
(C) Include census tracts in the order of rank described in 215
subparagraph (B) of this subdivision until including the next census 216
tract would cause the total population of all included census tracts to 217
exceed twenty-five per cent of the state's population. 218
(j) After developing criteria for workforce development plans as 219
described in subdivision (4) of subsection (h) of this section, the Social 220
Equity Council shall review and approve or deny in writing any such 221
plan submitted by an applicant for a final license. If the Social Equity 222
Council does not approve a workforce development plan for a cannabis 223
establishment on or before July 1, 2025, the cannabis establishment shall 224
submit a workforce development plan to the council not later than 225
October 1, 2025, or sixty days prior to the next renewal date for such 226
cannabis establishment's license, whichever is earlier. Not later than 227
sixty days after the cannabis establishment submits the workforce 228
development plan to the council, the council shall send notice to the 229
cannabis establishment disclosing whether such workforce 230
development plan has been approved, rejected or requires modification. 231
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(k) The Social Equity Council shall develop criteria for evaluating the 232
ownership and control of any equity joint venture created under section 233
21a-420j, 21a -420m, 21a -420u, 21a -420aa, [21a-420bbb] 21a-420bb or 234
[21a-420ccc] 21a-420cc and shall review and approve or deny in writing 235
such equity joint venture prior to such equity joint venture being 236
licensed under section 21a -420j, 21a -420m, 21a -420u, 21a -420aa, [21a-237
420bbb] 21a-420bb or [21a-420ccc] 21a-420cc. The council shall not 238
approve any equity joint venture applicant which shares with an equity 239
joint venture any individual owner who meets the criteria established 240
in subparagraphs (A) and (B) of subdivision (51) of section 21a -420, 241
other than an individual owner in their capacity as a backer licensed 242
under section 21a -420o. Except as provided in the policies and 243
procedures issued, or final regulations adopted, by the council pursuant 244
to section 21a -420h with respect to a sale or change in ownership or 245
control of a cannabis establishment license awarded to a social equity 246
applicant, no change shall be made in the ownership or control of an 247
equity joint venture that has been approved by the council under this 248
subsection during the seven-year period beginning on the date on which 249
such equity joint venture was licensed under section 21a-420j, 21a-420m, 250
21a-420u, 21a-420aa, 21a-420bb or 21a-420cc. 251
(l) The Social Equity Council shall, upon receipt of funds from 252
producers in accordance with subdivision (5) of subsection (b) of section 253
21a-420l, develop a program to assist social equity applicants to open 254
not more than two micro -cultivator establishment businesses in total. 255
Producers shall provide mentorship to such social equity applicants. 256
The council shall, with the department, determine a system to select 257
social equity applicants to participate in such program without 258
participating in a lottery or request for proposals. 259
(m) (1) The Social Equity Council shall review and either approve or 260
deny, in writing, any social equity plan submitted by a cannabis 261
establishment as part of the cannabis establishment's final license 262
application. The council shall approve or deny such social equity plan 263
not later than thirty days after such social equity plan is submitted to 264
the council. If the council denies any such social equity plan, the 265
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applicant may revise and resubmit such social equity plan without 266
prejudice. 267
(2) (A) Each licensed cannabis establishment shall (i) maintain an 268
active social equity plan at all times while such cannabis establishment 269
is in operation, and (ii) not later than March 1, 2026, and annually 270
thereafter, submit to the council a report disclosing the impact such 271
social equity plan had on the disproportionately impacted area in which 272
such cannabis establishment is located during the preceding calendar 273
year. 274
(B) The council shall review each report submitted pursuant to 275
subparagraph (A)(ii) of this subdivision and may, not later than sixty 276
days after completing such review, request that the licensed cannabis 277
establishment that submitted such report revise such cannabis 278
establishment's social equity plan to ensure that such social equity plan 279
furthers the principles of equity. 280
(3) Not later than July 1, 2024, the council shall update the criteria for 281
social equity plans described in subdivision (5) of subsection (h) of this 282
section to include a specific, points-based rubric to evaluate social equity 283
plans. 284
(n) The Social Equity Council shall approve the amounts, grantees 285
and purposes of any grants made by the council from the social equity 286
and innovation account or the Cannabis Social Equity and Innovation 287
Fund, established under section 21a-420f, and any contract executed by 288
and between the council and a grant maker shall require that the 289
amounts, grantees and purposes of any subgrants made by such grant 290
maker shall be approved by the council. 291
(o) Not later than [July 1, 2024, and quarterly thereafter] the first days 292
of January, April, July and October for the preceding calendar quarter , 293
the Social Equity Council shall prepare and submit a quarterly report, 294
in accordance with the provisions of section 11-4a, to the Governor, the 295
speaker of the House of Representatives, the president pro tempore of 296
the Senate, the majority leader of the House of Representatives, the 297
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majority leader of the Senate, the minority leader of the House of 298
Representatives, the minority leader of the Senate , [and] the joint 299
standing committees of the General Assembly having cognizance of 300
matters relating to appropriations and consumer protection and the 301
chairperson of the Black and Puerto Rican Caucus of the General 302
Assembly. The report shall include, but need not be limited to: 303
(1) The fiscal -year-to-date expenditures of the council, which 304
expenditures shall disclose, at a minimum: (A) All expenditures made 305
for personal services and the fringe benefit costs associated therewith; 306
(B) all expenditures made for consultants retained for the purpose of 307
reviewing applications for social equity applicant status; (C) all 308
expenditures made to provide businesses with access to capital and the 309
number of businesses that received access to such capital; (D) all 310
expenditures made to provide technical assistance for the start -up and 311
operation of businesses and the number of businesses that received such 312
assistance; (E) all expenditures made to fund workforce education, the 313
number of persons served by the workforce education programs 314
supported by such expenditures and the number of persons successfully 315
placed in relevant professional roles after completing such workforce 316
education programs; (F) all expenditures made to fund community 317
investment grants, the amounts, grantees and purposes of such grants 318
and, if any of such grants were made to a grant maker, the amounts, 319
grantees and purposes of any subgrants made by such grant maker; (G) 320
all expenditures made for promotional or branding items and which 321
promotional or branding items were purchased; (H) all expenditures 322
made for advertising or marketing campaigns; (I) all expenditures made 323
to advertising or marketing firms; (J) all expenditures made for 324
sponsorships; (K) all expenditures made for other community outreach; 325
(L) all expenditures made for travel; and (M) all other expenditures not 326
described in subparagraphs (A) to (L), inclusive, of this subdivision; and 327
(2) The status of the council's performance of the council's 328
responsibilities in the licensing process under RERACA, including, but 329
not limited to: (A) The number of applications for social equity applicant 330
status, social equity plans and workforce development plans pending 331
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before the council, categorized into the number of applications, social 332
equity plans and workforce development plans pending before the 333
council for (i) less than thirty days, (ii) at least thirty days but less than 334
sixty days, (iii) at least sixty days but less than ninety days, and (iv) at 335
least ninety days; (B) the number of applications for social equity 336
applicant status, social equity plans and workforce development plans 337
approved during the then current fiscal year, broken down by license 338
type; and (C) the number of applications for social equity applicant 339
status, social equity plans and workforce development plans denied 340
during the then current fiscal year, broken down by license type. 341
[(p) Not later than July 1, 2024, and monthly thereafter, the executive 342
director of the council shall prepare and submit a report, in accordance 343
with the provisions of section 11 -4a, to the council and the Black and 344
Puerto Rican Caucus of the General Assembly. The report shall include, 345
but need not be limited to: 346
(1) The expenditures the council plans to make during the month 347
immediately following submission of such report, which expenditures 348
shall disclose, at a minimum: (A) All expenditures the council plans to 349
make for consultants retained for the purpose of reviewing applications 350
for social equity applicant status; (B) all expenditures the council plans 351
to make to fund community investment grants, the amounts, grantees 352
and purposes of such grants and, if any of such grants are to be made to 353
a grant maker, the amounts, grantees and purposes of any subgrants to 354
be made by such grant maker; (C) all expenditures the council plans to 355
make for promotional or branding items, for advertising or marketing 356
campaigns, to advertising or marketing firms and for sponsorships; (D) 357
all expenditures the council plans to make for community outreach; and 358
(E) all expenditures the council plans to make for travel; and 359
(2) The status of the council's performance of the council's 360
responsibilities in the licensing process under RERACA, including, but 361
not limited to, the following information for the date of such report: (A) 362
The number of applications for social equity applicant status that are 363
pending before the council and the date each such application was 364
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submitted, broken down by license type, municipality, assembly district 365
and senate district; (B) the number of social equity plans that are 366
pending before the council and the date each such social equity plan was 367
submitted, broken down by license type; and (C) the number of 368
workforce development plans that are pending before the council and 369
the date each such workforce development plan was submitted, broken 370
down by license type.] 371
[(q)] (p) Not later than October 1, 2025, the council shall develop and 372
submit a strategic plan to the Governor and the joint standing 373
committees of the General Assembly having cognizance of matters 374
relating to appropriations and consumer protection. The strategic plan 375
shall include a framework that outlines the council's goals, planned 376
actions and priorities for the three -year period beginning October 1, 377
2025, and ending September 30, 2028. 378
[(r)] (q) Not later than October 1, 2025, the council shall develop and 379
adopt an ethical code of conduct for council members and staff. 380
[(s)] (r) Not later than January 1, 2026, and annually thereafter, the 381
members of the council and council staff shall complete an ethics 382
training course focusing on disproportionately impacted areas and the 383
cannabis industry. 384
(s) The council shall adopt regulations, in accordance with the 385
provisions of chapter 54, to implement the provisions of subsection (k) 386
of this section and subsection (a) of section 21a-420g, as amended by this 387
act. Notwithstanding the requirements of sections 4 -168 to 4 -172, 388
inclusive, in order to implement the provisions of subsection (k) of this 389
section and subsection (a) of section 21a -420g, as amended by this act, 390
prior to adopting such regulations the council shall, not later than 391
October 1, 2026, issue policies and procedures to implement the 392
provisions of subsection (k) of this section and subsection (a) of section 393
21a-420g, as amended by this act, that shall have the force and effect of 394
law. The council shall post all policies and procedures on its Internet 395
web site, and submit such policies and procedures to the Secretary of 396
the State for posting on the eRegulations System, at least fifteen days 397
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prior to the effective date of any policy or procedure. Any such policy 398
or procedure shall no longer be effective upon the earlier of either the 399
adoption of such policy or procedure as a final regulation under section 400
4-172 or October 1, 2027, if such regulations have not been submitted to 401
the legislative regulation review committee for consideration under 402
section 4 -170. Any violation of such policies and procedures or any 403
violation of such regulations related to any change in ownership or 404
control may be referred by the council to the Department of Consumer 405
Protection for administrative enforcement action, which may result in a 406
fine of not more than ten million dollars or action against the cannabis 407
establishment's license. 408
Sec. 2. Subsections (a) to (g), inclusive, of section 21a-420g of the 2026 409
supplement to the general statutes are repealed and the following is 410
substituted in lieu thereof (Effective from passage): 411
(a) The Social Equity Council shall review the ownership information 412
and any other information necessary to confirm that an applicant 413
qualifies as a social equity applicant for all cannabis establishment 414
license type applications submitted to the department and designated 415
by the applicant as a social equity applicant. The Social Equity Council 416
shall prescribe the documentation necessary for applicants to submit to 417
establish that the ownership, residency and income requirements for 418
social equity applicants are met. On or before September 1, 2021, the 419
Social Equity Council shall post such necessary documentation 420
requirements on its Internet web site to inform applicants of such 421
requirements prior to the start of the application period. Except as 422
provided in the policies and procedures issued, or final regulations 423
adopted, by the council pursuant to section 21a-420h, no change shall be 424
made in the ownership or control of a social equity applicant that has 425
been approved by the council during the period of provisional licensure 426
and for three years following issuance of a final license. 427
(b) Except as provided in sections 21a -420o and 21a -420aa to 21a -428
420cc, inclusive, prior to the first date that the department begins 429
accepting applications for a license type, the department shall determine 430
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the maximum number of applications that shall be considered for such 431
license type and post such information on its Internet web site. Fifty per 432
cent of the maximum number of applications that shall be considered 433
for each license type (1) shall be selected through a social equity lottery 434
for such license type, and (2) shall be reserved by the department for 435
social equity applicants. If, upon the close of the application period for 436
a license type, the department receives more applications than the 437
maximum number to be considered in total or to be reserved for social 438
equity applicants as set forth in this subsection, a third -party lottery 439
operator shall conduct a lottery to identify applications for review by 440
the department and the Social Equity Council. 441
(c) (1) The third-party lottery operator shall: 442
(A) Not be provided any application received after the close of the 443
application period; 444
(B) Give equal weight to every complete application submitted 445
during the application period; and 446
(C) Conduct multiple, separate geographic lotteries if required by the 447
department. 448
(2) For purposes of the lottery, the third-party lottery operator shall: 449
(A) Conduct an independent social equity lottery and general lottery 450
for each license type that results in each application being randomly 451
ranked starting with one and continuing sequentially; and 452
(B) Rank all applications in each lottery numerically according to the 453
order in which they were drawn, including those that exceed the 454
number to be considered, and identify for the department all 455
applications to be considered. 456
(d) (1) Prior to submitting an application, an applicant that is a 457
business entity shall register such business entity with the Secretary of 458
the State to do business in this state, and include with such application 459
an attestation that such applicant has so registered. 460
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(2) No applicant shall apply more than once in any application period 461
to the social equity lottery round, if applicable, or the general lottery 462
round. The department shall review the list of all lottery applicants in 463
the social equity lottery round and the general lottery round, 464
independently for each such round, to determine whether any applicant 465
has submitted more than one application under the same applicant 466
name. Except as provided in subdivision (3) of this subsection, if the 467
department determines that any applicant has submitted more than one 468
application in the social equity lottery round or the general lottery 469
round, all applications submitted in such round by such applicant shall 470
be disqualified and the department shall remove all such applications 471
from the pool of eligible applications the department provides to the 472
third-party lottery operator for selection in such round. 473
(3) If a social equity application is entered into the general lottery 474
round pursuant to subdivision (4) of subsection (e) of this section, 475
thereby resulting in two entries by the same social equity applicant in 476
the general lottery round, such entries shall not result in disqualification 477
under subdivision (2) of this subsection. Such social equity applicant 478
shall not be eligible to receive more than one license from any round of 479
the general lottery. If such social equity applicant is selected twice for 480
consideration in any general lottery round, the department shall 481
disqualify the second such selection and request that the third -party 482
lottery operator identify the next -ranked application in the applicable 483
lottery. 484
(4) No disqualification under this subsection shall result in any 485
refund of lottery fees. 486
(5) For the purpose of this subsection: (A) "Application period" means 487
the established period of time within which the department may accept 488
applications for a specific license type for the social equity or general 489
lottery; and (B) "round" means each time a lottery is run to determine 490
the ranking of applicants after the conclusion of an application period, 491
either for the social equity lottery or the general lottery. 492
(e) (1) Upon receipt of an application for social equity consideration 493
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sHB5351 / File No. 386 17

or, in the case where a social equity lottery is conducted, after such 494
lottery applicants are selected, the department shall provide to the 495
Social Equity Council the documentation received by the department 496
during the application process that is required under subsection (a) of 497
this section. No identifying information beyond what is necessary to 498
establish social equity status shall be provided to the Social Equity 499
Council. The Social Equity Council shall review the social equity 500
applications to be considered as identified by the third -party lottery 501
operator to determine whether the applicant meets the criteria for a 502
social equity applicant. If the Social Equity Council determines that an 503
applicant does not qualify as a social equity applicant, the application 504
shall not be reviewed further for purposes of receiving a license 505
designated for social equity applicants. The application shall be entered 506
into the general lottery for the applicable license type and may be 507
reviewed further if selected through such lottery, provided the 508
applicant pays the additional amount necessary to pay the full fee for 509
entry into such lottery within five business days of being notified by the 510
Social Equity Council that such applicant does not qualify as a social 511
equity applicant. Not later than thirty days after the Social Equity 512
Council notifies an applicant of the Social Equity Council's 513
determination that the applicant does not meet the criteria for a social 514
equity applicant, the applicant may appeal from such determination to 515
the Superior Court in accordance with section 4-183. 516
(2) Upon determination by the Social Equity Council that an 517
application selected through the lottery process does not qualify for 518
consideration as a social equity applicant, the department shall request 519
that the third-party lottery operator identify the next-ranked application 520
in the social equity lottery. This process may continue until the Social 521
Equity Council has identified for further consideration the number of 522
applications set forth on the department's web site pursuant to 523
subsection (b) of this section or until there are no remaining social equity 524
applications to be considered. 525
(3) For each license type, the Social Equity Council shall identify for 526
the department the social equity applications that qualify as social 527
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sHB5351 / File No. 386 18

equity applicants and that should be reviewed by the department for 528
purposes of awarding a provisional license. 529
(4) Any application entered into, but not selected through, the social 530
equity lottery shall not be reviewed as a social equity application, but 531
shall be entered into the general lottery for the applicable license type. 532
(5) After receiving the list of selected social equity applications 533
reviewed and approved by the Social Equity Council, the department 534
shall notify the third -party lottery operator, which shall then conduct 535
the independent general lottery for all remaining applicants for each 536
license type, rank all general lottery applications numerically including 537
those that exceed the number to be considered, and identify for the 538
department all of the selected applications to be reviewed. The number 539
of applications to be reviewed by the department shall consist of the 540
applications ranked numerically one through the maximum number 541
necessary to ensure that fifty per cent of the applications for each license 542
type identified through the lottery process are selected from the social 543
equity lottery and approved by the Social Equity Council. 544
(6) The numerical rankings created by the third-party lottery operator 545
shall be confidential and shall not be subject to disclosure under the 546
Freedom of Information Act, as defined in section 1-200. 547
(f) The department shall review each application to be considered, as 548
identified by the third -party lottery operator or Social Equity Council, 549
as applicable, to confirm such application is complete and to determine 550
whether any application: (1) Includes a backer with a disqualifying 551
conviction; (2) exceeds the cap set forth in section 21a -420i; or (3) has a 552
backer who individually or in connection with a cannabis business in 553
another state or country has an administrative finding or judicial 554
decision that may substantively compromise the integrity of the 555
cannabis program, as determined by the department, or that precludes 556
its participation in this state's cannabis program. 557
(g) (1) No additional backers may be added to a cannabis 558
establishment application between the time of lottery entry, or any 559
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sHB5351 / File No. 386 19

initial application for a license, and when a final license is awarded to 560
the cannabis establishment, except: [, if] 561
(A) If a backer of an applicant or provisional licensee dies, the 562
applicant or provisional licensee may apply to the commissioner , in a 563
form and manner prescribed by the commissioner, to replace the 564
deceased backer, provided if such applicant or provisional licensee is a 565
social equity applicant, the Social Equity Council shall review 566
ownership to ensure such replacement would not [cause the applicant 567
to no longer qualify] disqualify such applicant or provisional licensee as 568
a social equity applicant; and 569
(B) An applicant or provisional licensee that is a social equity 570
applicant may apply to the commissioner, in a form and manner 571
prescribed by the commissioner, for a one -time replacement of an 572
original backer, provided the original backer to be replaced is not an 573
individual who meets the criteria of subparagraphs (A) and (B) of 574
subdivision (51) of section 21a-420. 575
(2) A backer may be removed from a cannabis establishment 576
application selected through the general lottery at any time upon notice 577
to the department. 578
This act shall take effect as follows and shall amend the following
sections:

Section 1 from passage 21a-420d
Sec. 2 from passage 21a-420g(a) to (g)

Statement of Legislative Commissioners:
In Section 1(e)(3), " or agreements" was added for internal consistency;
in Section 1(k), "on which such equity venture is licensed" was changed
to "on which such equity joint venture was licensed " for accuracy and
consistency; and in Section 1(o), "quarterly" was added for clarity.

GL Joint Favorable Subst. -LCO

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sHB5351 / File No. 386 20

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do 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.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Resources of the General Fund GF - Potential
Revenue Gain
See Below See Below
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill allows the Social Equity Council (SEC) to adopt regulations
and issue certain policies and procedures and refer violations to the
Department of Consumer Protection, who can issue a fine of up to $10
million. This could result in a potential revenue gain to the General
Fund to the extent violations occur.
The bill also makes various modifications to the SEC s reporting
requirements and administrative duties which do not result in a fiscal
impact. It is anticipated that the SEC can accommodate these changes
within existing resources.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the number of violations.

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sHB5351 / File No. 386 21

OLR Bill Analysis
sHB 5351

AN ACT CONCERNING THE SOCIAL EQUITY COUNCIL'S
RECOMMENDATIONS REGARDING CANNABIS REGULATION.

SUMMARY
This bill makes several changes related to the Social Equity Council,
including:
1. allowing the council to conduct investigations it deems needed
to carry out its duties;
2. specifically prohibiting the change of ownership and control of
equity joint ventures and social equity applicants for seven and
three years after final licensure, respectively, but letting the
council allow otherwise through policies and procedures and
regulations;
3. consolidating reporting requirements by eliminating the
monthly report to the Black and Puerto Rican Caucus (BPRC) and
instead adding them to the required quarterly report; and
4. allowing an applicant or provisional licensee that is a social
equity applicant to replace an original backer, as long as the
backer is not a social equity applicant.
The bill also makes various minor, technical, and conforming
changes, including correcting certain statutory citations.
EFFECTIVE DATE: Upon passage
CHANGE IN OWNERSHIP OR CONTROL
Under existing law, cultivators, producers, dispensary facilities, and
micro-cultivators are prohibited from increasing their ownership in an
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sHB5351 / File No. 386 22

equity joint venture by more than 50% for seven years after receiving
final licensure. The law also requires the Social Equity Council to
develop criteria for evaluating ownership and control of any equity joint
venture. The bill specifically prohibits a sale or change in ownership or
control of a cannabis establishment license awarded to a social equity
applicant for the seven -year period beginning when the equity joint
venture is licensed, unless the council’s policies and procedures or
regulations allow it.
The bill (1) codifies the prohibition in changing ownership or control
of a social equity applicant for three years following final licensure and
(2) allows the council to make exceptions through policies and
procedures or regulations . Existing law requires the council to adopt
regulations and issue policies and procedures to prevent these changes.
Additionally, the bill requires the council to adopt regulations to
implement these provisions. Regardless of the Uniform Administrative
Procedure Act’s regulation adoption process, to carry out this provision
and before adopting the required regulations, the council must issue
policies and procedures, by October 1, 2026, to implement the bill’s
provisions. These policies and procedures have the force and effect of
law. At least 15 days before the policies and procedures take effect, the
bill requires the council to post them on its website and submit them to
the secretary of the state (SOTS) to be posted on the eRegulations
system. A policy or procedure is no longer effective once SOTS codifies
the final regulation or, if the regulations have not been submitted to the
Regulation Revi ew Committee, October 1, 2027 , whichever occurs
earlier.
Under the bill, the council may refer any violation of these policies or
procedures or regulations to the Department of Consumer Protection
(DCP) for administrative enforcement action, which may result in a fine
of up to $10 million or action against the cannabis establishment’s
license.
By law, a “cannabis establishment” is a cannabis producer,
dispensary facility, cultivator, micro -cultivator, retailer, hybrid retailer
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sHB5351 / File No. 386 23

(one licensed to sell both recreational cannabis and medical marijuana),
food and beverage manufacturer, product manufacturer or packager,
delivery service, or transporter.
REPORT CONSOLIDATION
Under current law, the Social Equity Council must submit (1) a
monthly report to the BPRC and (2) quarterly reports to the governor,
legislative leaders, and Appropriations and General Law chairpersons.
The bill consolidates the reporting by eliminating the monthly
reporting requirement and instead adds the BPRC to the quarterly
report. These reports have similar requirements, except the monthly
report require s the council to report on planned expenditures for the
following month while the quarterly report covers expenditures already
made. The monthly report also requires the pending social equity
applicant applications to be broken down by municipality, assembly
district, and senate district, while the quarterly report requires pending
social equity applicant applications, social equity plans, and workforce
development plans to be broken down by how long they have been
pending.
ADDING BACKERS OR PROVISIONAL LICENSEES
Existing law generally prohibits additional backers from being added
to a cannabis establishment application between t he lottery entry or
initial license application and when the final license is awarded.
The bill allows an applicant or provisional licensee that is a social
equity applicant to apply to the DCP commissioner, in a way he
prescribes, for a one-time replacement of an original backer, if the backer
is not a social equity applicant.
BACKGROUND
Social Equity Council
By law, the Social Equity Council is charged with, among other
duties, promoting and encouraging full participation in the cannabis
industry by people from communities disproportionately harmed by
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sHB5351 / File No. 386 24

cannabis prohibition.
Related Bill
sHB 5350, § 5 4, favorably reported by the General Law Committee,
generally prohibits a social equity applicant issued a cannabis license
from changing ownership or control for three years after final licensure.
COMMITTEE ACTION
General Law Committee
Joint Favorable
Yea 16 Nay 5 (03/16/2026)