Final Version of CT Bill HR 5150 Takes Shape

Following a flurry of activity that completely altered the sweeping cannabis/hemp bill currently under consideration by Connecticut’s Senate, HB 5150 was decisively approved yesterday by the full House by a margin of 130-16, with five Representatives abstaining. Now, the central question for HB 5150 in its zig-zag journey to ratification is which version will make it across the finish line, if indeed one does. The likelihood that HB 5150 will simply die seems unlikely this late in the process, but of course anything can happen. If it is destined for passage, however, the version currently before the Senate may be the one that makes it to the governor’s desk, having survived a gauntlet of committees and gained significant bipartisan support along the way. It is also no longer amenable to amendments, per its sponsor, Rep. Mike D’Agostino, but if we have learned anything, we have learned to expect anything.

Analysis of the current iteration of the bill by the Office of Legislative Research was filed on Wednesday, as was its fiscal impact by the Office of Fiscal Analysis. The bill was then assigned Senate Calendar Number 414. As recently as Monday, however, even as members of the Finance committee were voting on it, HB 5150 was being referred to by both the committee clerk and lawmakers as a “work in progress,” an understanding that appeared to give several committee members with lingering concerns leeway to vote yes in order to move the bill quickly out of the committee for a full airing in the House. What was unclear was precisely what their lingering objections to the bill were, or whether those concerns were subsequently addressed in the amended bill that was presented yesterday to the full House, where it was described at length by Rep. D’Agostino, who then answered questions posed mostly by Republicans seeking clarification on provisions in the bill pertaining to enforcement, of which there are many.

Indeed, the main intent of the bill is for the state to regain control over every aspect of cannabis production, distribution, and usage in Connecticut and if necessary take a hard line in doing so by, among other things, empowering municipalities with added enforcement options and raising fines, sometimes exorbitantly, for any cannabis-related activity outside the prescribed goalposts. The apparent belief of the legislature by and large is that cannabis – or at least THC, any amount of THC – is toxic, more akin to poison than medicine, and certainly worth repressing rather than supporting. As such, it is kind of difficult to imagine a thriving marketplace for cannabis developing in Connecticut when political disinterest is aligned so closely with what feels like outright hostility from the state AG and the impenetrable Department of Consumer Protection, but you never know.

This version of the bill also works to strengthen the position of the state’s MSOs, a point made by one lawmaker during floor debate, but that appears to be the price lawmakers are willing to pay even if it means rewriting THC thresholds such that hemp producers – who did everything they were told to do to stay within the previous thresholds – will be driven out of business, or requiring signs in dispensaries that say remediation may be harmful but not requiring products that have been remediated to be labeled as such. As a result, the only safe assumption one can make is that everything has been remediated, which puts a potentially compromised patient in quite a bind.

But don’t take my word about the bill. The best person to explain the purpose of HB 5150 is the lawmaker who did just that for his House colleagues in the minutes leading up to Tuesday’s vote. Rep. D’Agostino’s description of the main tenets of the bill are reprinted in full below:

Thank you, Mr. Speaker. This is a strike-all amendment, folks, so the amendment will become the bill. So, this will really be the debate on the bill, this conversation on the amendment. We are again talking about cannabis. I know there’s been some back and forth in the chamber the last couple of nights about cannabis. And obviously, we disagree on a number of pieces with respect to the legalization of cannabis, I think, respectfully, and we’ve seen that in the debate that’s happened over the last couple of nights.

One area, though, where there has been, I think, uniform bipartisan agreement is with respect to the need for enforcement and regulation. We passed a regulated scheme with respect to cannabis, and I think both sides of the aisle understand and agree that we need to make sure that the rules are being followed, that there’s not product out there that is unregulated, and that is being sold to minors, that has been sold in convenience stores, that is outside of the strict structures that we created.

And that is the main purpose of this amendment. I want to thank my friends on the other side of the aisle, particularly on the General Law Committee, and our ranking member, who really worked with us together to come up with a bill that I think satisfies a lot of concerns we we’re hearing from multiple members of this legislature with respect to enforcement. So, what does the amendment do? It does a number of things in that regard.

 First and foremost, we recognize that, frankly, having enforcement solely in the hands of our police with respect to a regulated marketplace doesn’t work. They’re not equipped well to go into stores and understand what product complies and what product doesn’t comply. And what are they going to do, arrest the shop kid putting stuff on the shelves? No. We want this enforcement in the hands of the AG and DCP, where it belongs. To our AG’s credit, they’ve been very aggressive about going in and trying to shut down some of these alternative products on the market that we’ll talk about tonight, but they need help.

So, and this was a suggestion from the Minority Leader, we are going to make it a per se CUTPA violation to sell cannabis products outside of our regulated marketplace. That’s a really good idea. Because right now, he goes into court, he’s got to prove an entire case with respect to the elements of a Connecticut Unfair Trade Practices act violation. Now, it’s a per se CUPTA violation, and we add provisions that allow you to go to court and seek to shutter the doors of these vape shops that are selling illegal cannabis, and the towns can get a piece of the revenue, fines that can be levied with respect to that enforcement.

Those are two new pieces that will help control this marketplace more, and frankly, if you’re a supporter of this marketplace it’s helpful too, because if you’re a town that’s approved for legal cannabis the last thing you want is a vape shop next door that’s selling a competing illegal product. So, both for towns that don’t want it and towns that do want it, those are good suggestions embedded in this bill.

We do a couple of other things with this bill. We recognize that, frankly, the money has dried up to start these businesses, and so we say to a cultivator, ‘You don’t have to scale all the way up to 25,000 square feet, you can convert down to become a micro cultivator, and you’ve got to start growing now, because we need more flower, more product, in the marketplace. We’ve got a bit of a shortfall right now. So, we’re making it easy for people to convert down and produce on a smaller scale rather than a larger scale that they’re unable to do.

Now, another big piece of this bill, and this is something you’ve all heard a lot about, are these hemp products, these THC-infused hemp products. Let me just spend a second on that, because it’s important to frame the debate. Remember, cannabis is cannabis, and we strictly regulated that, and it’s illegal federally, although they just changed the Schedule from Schedule 1 to Schedule 3 today, that it does not impact our act by the way. The feds in 2019 for reasons I don’t understand, and I’m not sure they understand, also legalized hemp production. Now, hemp is part of the same plant, the cannabis plant, but we say it’s hemp if it contains less than 3 percent THC, the psychoactive ingredient, on a dry weight basis. And they legalize that, and then we in this legislature also created our own hemp manufacturing structure in 2019, where we legalize those products too.

I don’t think anybody in here wanted or intended to allow the production of hemp products that would contain the intoxicating THC product, but that’s what’s happened unintentionally, because people figured out a way to extract from the hemp oil that intoxicating THC. So, this bill addresses that. This bill seeks to constrain that, and instead of seeing these products now at your convenience stores or your supermarkets, where they are unregulated and can be sold to anybody, even under 21, we change all that with this bill. We say, those particular products have to be sold to people over 21. they have to be manufactured in accordance with our cannabis testing standards and our hemp manufacturing standards, and they have to be sold only by certain types of stores. Remember those gummies we held up last year? Those can now only be sold in a store where that’s the only material they sell, i.e. the CBD stores. No more convenience stores, no more supermarkets, no more drugstores. It’s out of there, and it’s age-gated.

You’re also seeing these hemp-infused beverages. A lot of them are coming in from out of state. We don’t know how they’re made. We don’t know exactly what’s in them. We don’t test them here. We don’t regulate them here. We’re changing all of that now. This was the subject of a lot of discussion, and we thought the best way to control these beverages was to shoehorn them a bit into our liquor statutes, and say, okay, the only places you can buy these are in the dispensaries or in the liquor stores, 21 and older. And here’s another reason why we did this. You’ve got these products coming in from out of state. Remember, they’re legal federally, folks. That means we can’t just ban them [because] we run into a Commerce Clause problem. They are illegal federally until the Feds change the Agricultural Act.

So, what do we do if we can’t ban them? We can regulate the hell out of them, and that’s what this bill does. We say, okay, these products need to be manufactured in accordance with our standards, they need to be labeled in accordance with our standard, they have to have disclosures in accordance with our standards. And if you’re a wholesaler, bringing those products into the state of Connecticut, you have to verify that they meet all of our standards, and if you can’t do that, and you won’t do that you’re not a wholesaler anymore, and you’re subject to strict penalties from DCP, and we’ll put you out of business. We think that is going to severely constrain – appropriately, constitutionally, in a regulated marketplace – these products coming in from out of state. And so, they’ll likely only be manufactured by our authorized cannabis…manufacturers here in Connecticut, who are familiar with those standards and processes and meet those standards and processes, and any other manufacturer in this state that can show that they meet those manufacturing processes.

There was a lot of discussion about why we would allow somebody else to make these products outside of the cannabis marketplace. As I mentioned, it’s because we have our own equivalent version of the Agricultural Act. The products are legal here, so the only way to actually get them off the market completely from anybody else other than the cannabis manufacturers is to repeal our own state’s Agricultural Act. In a short session, that was too big of a lift, but what we can do, like I said, is regulate the hell out of them. That’s what this bill does, folks.

I’ll just close with this. I know there’ll be some questions, and I’m happy to answer them. But remember, it’s like 1936 here. We’re three years after Prohibition ended. The liquor laws have been evolving over time for decades since Prohibition ended. We’re three years into this process. I’ve said it before. I’ll say again, we’re going to keep coming back and back in this chamber with respect to our cannabis laws and how they evolve and how we respond to that marketplace, and make sure we remain in control of it. That’s what this bill does. That’s what the amendment does. Mr. Speaker, I urge adoption.