Connecticut governor halts social equity funds, orders review of cannabis council

Connecticut Gov. Ned Lamont paused social equity funds earmarked for community reinvestment as his office kicks off a program review.

The move stops distribution of $33.4 million collected from the sale of legal cannabis in state 10 days after complaints about a lack of transparency were lodged by members of the legislative Black and Puerto Rican Caucus and “other stakeholders,” according to WSHU Public Radio.

“Several stakeholders, including social equity applications and legislators, have voiced concerns regarding the financial management and decision-making processes of the programs and initiatives under the purview of the (Social Equity Council),” Lamont said in a letter to State Comptroller Sean Scanlon.

Lamont asked Scanlon to conduct “a comprehensive review of the SEC” that would focus on governance practices, program effectiveness, how the council awards grants and contracts, and other areas of concern, according to the CT Mirror.

The Social Equity Council is responsible for distributing grants and approving social equity plans for cannabis producers and vendors. However, industry sources told CT Mirror that the council’s criteria for approving plans have been “unclear.”

The halt in funds distribution comes as Connecticut’s adult-use cannabis program faces a slow rollout. Entrepreneurs in the state face a variety of hurdles, including stringent regulatory processes, limited capital availability, and scarce real estate options.

In 2023, the Social Equity Council allocated $6 million to third-party organizations to administer grants, according to Connecticut Inside Investigator. Still, some members at the time had expressed concerns about the timeline and effectiveness of the grant-making process for the 2024 distribution.