CT Cannabis Entrepreneurs Seek Flexibility in Selling Equity Stakes

Connecticut’s cannabis industry, originally built with a focus on social equity, is facing growing pressure to revise some of its early restrictions. Social equity license holders are now asking lawmakers to shorten the required ownership holding period, arguing that current rules are limiting growth and hurting long-term success.

Seven-Year Rule Under Fire

Under current law, social equity cannabis owners must maintain at least a 50% stake in their business for seven years. The policy was designed to prevent predatory buyouts from large corporations and to ensure long-term community ownership. But many small business owners say the rule is too restrictive, especially as market conditions shift and early-stage operators face cash flow issues.

Push for Change

Entrepreneurs like Kennard Ray of Fine Fettle and Derrick Gibbs of Budr Cannabis are calling for a reduction in the holding period from seven years to three. They believe this change would still honor the spirit of the law while giving owners more realistic exit and partnership options. Supporters say this flexibility could help stabilize social equity businesses before they fail or are forced to operate with limited resources.

Legislative Discussions Underway

A new proposal — House Bill 7178 — is now being considered by lawmakers. Some, including Rep. Roland Lemar, acknowledge that changes may be necessary, but others are cautious about opening the door to more corporate consolidation in a market meant to empower disadvantaged communities. The Social Equity Council, led by Brandon McGee, is currently reviewing the bill and its long-term implications.

Why It Matters

This debate could shape the future of cannabis entrepreneurship in Connecticut. Supporters of reform argue it’s about giving owners a real chance to grow or exit on their terms. Critics worry it may dilute the equity goals the program was built on. As the industry matures, how Connecticut responds could influence other state models as well.

📌 Originally reported by the CT Mirror. Read the full article here (opens in a new tab) .