Senate Bill 888, An Act Responsibly and Equitably Regulating Adult-Use Cannabis

Possession of up to 1.5 oz of cannabis is permitted for those age 21 and above. Possession of between 1.5 oz to 2.5 oz is an infraction, while possession above 2.5 oz is an infraction for a first offense and a class C misdemeanor for a second offense. Individuals under 21 who possess up to 2.5 oz of cannabis will face infractions, not misdemeanors.

Individuals with convictions under 21a-279(c) before October 1, 2015 (mostly individuals with small amounts of cannabis) will have their convictions automatically erased, while those with convictions after that date will need to file a petition with the courts. The IT cost for implementing automated erasure ($2M) is included in the Governor’s capital budget recommendations.

Consumers and licensed cannabis establishments are protected against enforcement of state drug laws. Possession and sale of cannabis paraphernalia is permitted. Cannabis products can only be sold to consumers by licensed cannabis businesses, though consumers may gift cannabis products to one another. Home grow penalties are reduced from the existing statute. Individuals who work in the cannabis industry or use cannabis may not be denied professional licenses from the state on that basis.

Parole and probation cannot be revoked for lawful possession or use of cannabis, except in specific circumstances.

Law enforcement may not conduct a search, stop, or seizure based on the odor of cannabis, except in the context of impaired driving.

Class C misdemeanor to provide cannabis to domesticated animals.

The adult use license structure will include three license types, micro-cultivator, food and beverage manufacturer and delivery that have lower barriers to entry and are designed to promote equity.

The Governor’s budget will fund a social equity analysis conducted by an independent third party to help identify communities that have been disproportionately harmed by cannabis prohibition and enforcement.

The Governor will establish an Equity Commission to:

Oversee the social equity analysis by an independent third party.

Advise on a social equity program in the legal cannabis market and promote and encourage full participation in the cannabis industry by persons from communities that have been disproportionately harmed by cannabis prohibition and enforcement.

Develop proposals regarding how individuals and neighborhoods that have been most impacted by cannabis prohibition and enforcement can benefit from the creation of a legal cannabis market, including investment of revenue into those communities and providing for licenses to equity applicants.

Ensure that any medical cannabis establishment that will participate in the adult-use market has a plan to address equity issues.

While the Equity Commission will be analyzing revenue distribution in the out years, from FY 2024 onward, there is already a commitment that 50% of the excise tax ($26.8 million by FY 2026) will go to municipal aid and social equityand provide greater resources to municipalities whose residents, mostly from black and brown communities, have been disproportionately and unjustly impacted by cannabis laws and enforcement.

The legalization of cannabis possession and the erasure of prior convictions will help erase some of the disproportionate impact of the War on Drugs on our state’s black and brown communities. 

Individuals must be 18 to work or do business in the cannabis industry.

Any sale of cannabis must be conducted by a state-licensed establishment. Existing medical producers may become licensed for operation in the adult-use market, and existing medical dispensaries may also be licensed for adult-use

Interstate commerce in cannabis is prohibited.

Stocking fees and exclusive contracts between retailers and cultivators/manufacturers are prohibited so as to maintain competition in the market.

A retailer may not knowingly sell more than one ounce per day to a consumer.

Employees in the cannabis industry must be registered with DCP. Backers and key employees must be licensed by DCP, with state and federal background checks.

DCP will establish regulations regarding various product requirements. DCP may set different product limitations on products for adult-use cannabis than products for medical use. 

Limits on advertising by cannabis establishments: no use of toys, no advertising in media with >10% audience expected to be minors, within 500 feet of a school. Required disclaimer not to use if under 21. Cannabis or paraphernalia may not be visible from a public right-of-way.

Licenses will be issued by lottery, not RFP. Each backer may be involved in at most two licenses of each type. Lottery winners receive a provisional license. A provisional licensee must have a seed-to-sale vendor, right to commercial space, and zoning approval from the town in order to be fully licensed and begin operating.

In order to protect access to medical marijuana for qualifying patients, the commissioner may deny a request for a dispensary to change locations.

No employee at DCP may have a direct interest in the cannabis industry.

Individuals and businesses in the cannabis industry are exempt from laws on cannabis possession and dealing, so long as they are going about their business as licensed.

Cannabis establishments must maintain policies and procedures for all aspects of management of cannabis and cannabis products. Cannabis establishments must use seed-to-sale tracking. Data from seed-to-sale tracking exempt from FOI.

Cannabis establishments must maintain four years of business records and make such records available to DCP upon request. DCP can conduct inspections and require audits.

DCP may fine or revoke a license from an establishment that provides false information to the department or the public, has insufficient controls against diversion or theft, does not keep accurate records, sells tampered products, or makes underage sales. A licensee may request a hearing upon such a fine or revocation by DCP.

DCP may issue regulations as necessary for implementation.

DCP will make recommendations about further statutory changes to allow home-grow and on-site consumption or social event licenses.

Parties must notify the Office of the Attorney General if they seek to dispose of or transfer control over a cannabis establishment. Parties may be fined or ordered to comply.

Cannabis establishments must purchase renewable energy.

DOB and CID to make recommendations about access to depository banking, commercial mortgages, and insurance by cannabis establishments.

Alcohol and Drug Policy Council to make recommendations about public health impact and limiting access for minors.

Update the possession limit for a qualifying patient and primary caregiver to five ounces.

Qualifying patients would be allowed to purchase cannabis from any dispensary facility or hybrid retailer. Such facilities or retailers shall record sales of medical cannabis electronically within one hour of such transaction.

Change the meeting schedule for the Board of Physicians. Allows new conditions to be added to the medical program through guidance.

Allow cannabis establishments to conduct research under existing research framework.

Municipalities may use their zoning code or zoning ordinances to regulate cannabis establishments, except for medical marijuana establishments. If municipalities take no action, a cannabis establishment shall be zoned as if it were any other type of similar business. Municipalities may prohibit or restrict the hours and signage of such establishments. Municipalities may not prevent delivery of cannabis products when the delivery is made pursuant to this act. Municipalities may charge necessary and reasonable costs for public safety for the first thirty days an establishment is open. This section prohibits municipalities from entering into local benefit agreements with cannabis establishments.

Municipalities may prohibit or otherwise regulate the consumption of cannabis in any public spaces within the municipality. Municipalities may allow outdoor consumption of cannabis at restaurants. Individuals may be fined up to $50 for consumption in prohibited locations. Businesses can be fined up to $1000 for a violation of this section.

Incorporate cannabis smoking and cannabis vaping into the Indoor Clean Air Act, and strengthen the Act in several ways: (1) prohibit smoking and vaping at places of employment and within 25 feet of buildings; (2) prohibit smoking and vaping in hotel and motel rooms; (3) prohibit smoking and vaping in psychiatric facilities and correctional facilities. Exceptions are maintained for smoking and vaping in outdoor portions of restaurants, where permitted by municipalities.

Lodging establishments may not prohibit consumption of non-smoking or non-vaping cannabis in non-public areas, such as a hotel room. 

Consumption of cannabis on state lands or waters is prohibited. A violation is an infraction and may be fined at up to $250.

Set a fine for a cannabis licensee who sells cannabis to a minor (under 21), and a fine for anyone who induces a minor to procure cannabis.

Cannabis licensees may keep copies of IDs of individuals who may look underage. DCP may require cannabis licensees use an online age verification system.

Prohibit using a false ID to purchase cannabis. A first offense is an infraction, and a second offense is a class D misdemeanor.

Prohibit parents and others from providing cannabis to their children or allowing members of households who are underage from possessing or using cannabis. A violation is a class A misdemeanor.

Prohibit loitering by minors at a cannabis establishment and prohibits entry into a cannabis establishment by a minor unless they are an employee or accompanied by a parent.

The presence of cannabis metabolites in any test of a medical patient or parent or guardian shall not result in adverse action from a medical provider or DCF, respectively.

A test that solely results in a positive for THC-COOH and not any active cannabinoid  (typically a urine test) shall not be evidence of impairment and shall not result in a negative action by a landlord, educational institution, or employer. However, certain types of employers, such as employers with federal contracts or that have safety-critical positions like commercial drivers, construction workers, and medical professionals, are exempted from these provisions.

All employers all allowed to maintain drug-free workplaces and to take employment action against an employee who is impaired at work.

Enforced through a private right of action, not through Department of Labor enforcement.

Make it a class C or D misdemeanor to consume cannabis while driving a vehicle or to smoke cannabis while a passenger in a vehicle.

Police Officer Standards and Training Council to ensure adequate numbers of Advanced Roadside Impaired Driving Enforcement (ARIDE) and Drug Recognition Expert (DRE) trained officers.

Create a behavioral impairment standard that will allow per se and criminal sanctions against drivers who are impaired. Allowfor the admission in a per se hearing and in court of (1) the results of a drug influence evaluation performed by a certified drug recognition expert, and (2) refusal of the non-testimonial aspects of the drug influence evaluation. A finding of behavioral impairment will lead to the same sanctions as for impairment from alcohol, such as license suspension and fines. These changes are applied to CDL context and investigation of accidents as well.

Update impaired boating laws in line with above.

There are three tax types on cannabis: excise taxes on cultivation, a municipal sales tax at retail, and the state sales tax at retail and delivery.

Excise taxes apply to all cannabis production including on production of medical marijuana, while municipal and state sales taxes apply only to the sale of non-medical cannabis products.

The excise taxes are $1.25 per dry gram of flower, $0.50 per dry gram of trim, and $0.28 per gram for wet cannabis. The excise tax will be collected upon the first use, transfer, or sale of cannabis. 50% of the excise tax proceeds will be directed toward municipal aid.

The standard sales tax rate will apply statewide (including prepared foods), and towns will collect a 3% sales tax for their own revenues.

State PIT/CIT would also apply to net revenue (gross revenue minus COGS) for cannabis establishments, due to our state linking to IRS Code 280E. 

Cancel the existing tax penalties that have been assessed on individuals for cannabis possession, and we will repeal the Controlled Substances Tax Act. This act assessed tax fines/penalties on people convicted of selling drugs. This act was written in the 1990s as a punitive approach to drug crimes, and we are affirmatively moving away from that approach.

From FY 2024 onward, 50% of the excise tax ($26.8 million by FY 2026) will be intercepted and provided to municipalities. This additional aid will help municipalities whose residents, most from black and brown communities, have suffered injustices as a result of a racially-discriminatory War on Drugs, allowing those municipalities to reduce property taxes, increase services and promote social equity.