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Cannabis council members urge a state-chartered bank to finance low-income entrepreneurs

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Members of the state’s Social Equity Council planning for adult-use cannabis sales in Connecticut on Tuesday stressed the need to focus on business opportunities for neighborhoods hurt by the failed war on drugs by making it easier for lower-income people to get into the business..

During an hour-long briefing from the top drug regulator in the state Department of Consumer Protection, council members pushed the option of a new bank that would be chartered by the state, as federal laws against cannabis make existing banks very hesitant to open accounts for the growing marijuana industry.

Fees alone to enter the cannabis business range from the thousands of dollars to the millions, council member Joseph Williams, a Hartford business owner associated with the Connecticut Small Business Development Center in the School of Business at UConn, told the group as he pushed for a new bank.

“Many people in the disproportionate area cannot afford [the fees] and they will have to partner with some kind of entity, whether it is private equity or some kind of investor,” Williams said, stressing that financing is the biggest challenge for Black and brown people.

“They need to source capital,” Williams said. “One of the biggest things around social equity that has eluded us is the lack of capital and I find we really need to address that as quickly as possible.”

Melissa McCaw, secretary of the state Office of Policy and Management, said provisions of th cannabis legalization law allow money received by the council to be reinvested, and there will be an opportunity to go to the bond market.

Another council member, Edwin Shirley, a financial adviser, predicted that as the retail sales program starts, “I do believe that there will be significant interest from the private sector in providing capital.”

Williams also warned that the rollout of the new industry also needs to make sure that too many producers, retail and delivery licenses do not saturate the potential market when it starts. The target date is late 2022.

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