Cannabis Establishment Notice of Material Change Filing

INTRODUCTION

The Responsible and Equitable Regulation of Adult-Use Cannabis Act (RERACA), codified at Conn. Gen. Stat. § 21a-420 et seq. governs the processes surrounding the use of cannabis by adults over the age of twenty-one in Connecticut. 

Cannabis Establishment Notice of Material (NOMC) Change Filing
Pursuant to Conn. Gen. Stat. § 21a-422k, all involved parties who intend to enter a transaction that will result in a material change to a cannabis establishment must file notice with the Office of the Attorney General for review. Examples of a material change include, but are not limited to, the addition of a backer, a change in ownership of an existing backer, and the transfer of assets or security interests from one cannabis establishment to another.

*Please note that the Attorney General’s Cannabis Establishment NOMC review is separate and distinct from the process and legal requirements to obtain approval from the Connecticut Department of Consumer Protection for a sale or change in ownership or control of a cannabis establishment license pursuant to C.G.S. § 21a-420h. Information on this process is available on the Connecticut Department of Consumer Protection’s Adult-Use Cannabis website: Adult-Use Cannabis Licensing Program (ct.gov) and Can I change backers? (ct.gov).

GENERAL CANNABIS ESTABLISHMENT NOMC INSTRUCTIONS/FILING INFORMATION 
 
1. WHO NEEDS TO FILE A CANNABIS ESTABLISMENT NOTICE OF MATERIAL CHANGE?

All persons, as defined in Conn. Gen. Stat. § 21-420(39), involved in a transaction that results in a material change to a cannabis establishment must file “a written notification with the Attorney General”.  If all parties have not filed a written notification, then “no person shall, directly or indirectly, enter into a transaction that results in a material change to a cannabis establishment.”  The written notification must be filed at least thirty (30) days prior to the effective date of the proposed transaction. 

2. ELEMENTS OF THE CANNABIS NOTICE OF MATERIAL CHANGE:

The required cannabis notice of material change is to include the following information: all parties to the material change; the nature of the material change; the type of cannabis establishments involved; a detailed description of the transaction; and a copy of the contract, memorandum of understanding, letter of intent or other document implementing the transaction.  The notice is to be submitted, at least thirty (30) days prior to the effective date of the transaction, electronically to the Office of the Connecticut Attorney General at AG.CannabisAcquisitions@ct.gov.  The Attorney General may request additional information or documentary material relevant to the proposed transaction as part of the review.

3. SUBMISSION OF NOTICE – TIMING: 

The notice is to be submitted electronically, at least thirty (30) days prior to the effective date of the transaction, to the Office of the Connecticut Attorney General at AG.CannabisAcquisitions@ct.gov.  Alternatively, notice materials may be submitted in a hard-copy format or on a disc format (i.e., CD or DVD) or other electronic media and submitted by first class mail to Nicole Demers, Deputy Associate Attorney General / Chief of the Antitrust Section, Office of the Connecticut Attorney General, 165 Capitol Avenue Hartford, CT 06106.

The Attorney General may request additional information or documentary material relevant to the proposed transaction as part of the review.  In the event of a request for additional information or documentary material, the thirty-day waiting period shall be extended until thirty (30) days after the parties have substantially complied, as determined solely by the Attorney General.

In individual cases, the Attorney General may terminate the thirty (30) day waiting period and allow the parties to proceed with the transaction. 

4. CONFIDENTIALITY:

The fact that parties intend to enter a transaction that results in a material change to a cannabis establishment and the information provided to the Attorney General as part of the required notice will be maintained in confidence by the Attorney General and is exempt from the Connecticut Freedom of Information Act.  No such information or documentary material submitted to the Attorney General may be made public, except as may be relevant to any administrative or judicial action or proceeding.

5. DEFINITIONS:

Material change, as defined by Conn. Gen. Stat. § 21a-422k(a), means:

(A) the addition of a backer, 
(B) a change in the ownership interest of an existing backer, 
(C) the merger, consolidation, or other affiliation of a cannabis establishment with another cannabis establishment, 
(D) the acquisition of all or part of a cannabis establishment by another cannabis establishment or backer, and 
(E) the transfer of assets or security interests from a cannabis establishment to another cannabis establishment or backer.

Backer, as defined by Conn. Gen. Stat. § 21a-420(2), is any individual with a direct or indirect financial interest in a cannabis establishment. A backer holds at least five percent of total ownership or interest rights (in aggregate with the individual and their spouse, parent, or child) and participates directly or indirectly in the control, management, or operation of the cannabis establishment.

Cannabis establishment, as defined by Conn. Gen. Stat. § 21a-420(4), is a producer, dispensary facility, cultivator, micro-cultivator, hybrid retailer, food and beverage manufacturer, product manufacturer, product packager, delivery service or transporter.

Transfer, as defined by Conn. Gen. Stat. § 21a-422k(a)(4), means to sell, transfer, lease, exchange, option, convey, give or otherwise dispose of or transfer control over, including, but not limited to, transfer by way of merger or joint venture not in the ordinary course of business.

Person, as defined in Conn. Gen. Stat. § 21-420(39), means an individual, partnership, limited liability company, society, association, joint stock company, corporation, estate, receiver, trustee, assignee, referee or any other legal entity and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination thereof.

6. FAILURE TO FILE:

Any person, or officer, director or partner thereof, who fails to comply with any provision of Conn. Gen. Stat. § 21a-422k is liable to the state for a civil penalty of up to twenty-five thousand dollars ($25,000.00) for each day the person is in violation.  A person who fails to substantially comply with the notification, submission, or waiting period requirements can be ordered to comply by the court. The court also has the power to extend the waiting period and grant equitable relief in cases of noncompliance.

7. QUESTIONS:

Questions may be submitted to AG.CannabisAcquisitions@ct.gov.