Greater transparency about who owns cannabis establishments may soon be coming to Connecticut if a bill, which would subject ownership changes to the state’s public records law, passes.

HB 5350 would reverse current state law that currently exempts “material changes” to ownership stakes in cannabis establishments from disclosure under the Freedom of Information Act (FOIA). It’s a small section in a much larger cannabis regulation bill that, among other things, increases the allowable delta-9-tetrahydrocannabinol (THC) limit in infused beverages and edibles.

At a public hearing, and in debate in the General Law Committee over whether to advance the bill, those far more controversial proposals received the majority of attention of the bill’s 91 sections. The section subjecting records related to material changes in ownership to FOIA was not debated.

Under existing law, passed as part of the law initially making recreational cannabis legal, the attorney general’s office must be notified in writing any time there is a material change to a cannabis establishment, including a change in ownership, a merger, or the addition of a backer. There’s also a 30-day waiting period before a change can go into effect, which allows the attorney general’s office to determine whether the proposed change would violate antitrust laws.

The law also specifically exempts those written notifications from FOIA disclosure, “except as may be relevant to any administrative or judicial action or proceeding.” Material provided as part of the requirement is currently returned to the individuals who submitted it after the attorney general makes a determination.

But HB 5350 would change that, and stipulate not only that those materials are to be retained by the attorney general’s office in keeping with existing records retention schedules, but that they are public records and disclosable under FOIA.

Should the bill pass as written, it would allow for greater public understanding of Connecticut’s cannabis industry landscape, which has not been without controversy since the Responsible and Equitable Regulation of Adult-Use Cannabis Act (RERACA) was passed in 2021, legalizing recreational cannabis and establishing regulatory guidelines for the new industry.

The Social Equity Council (SEC) was a key element of RERACA, aimed at ameliorating the War on Drugs’ disproportionate impact on and targeting of minority communities. Under RERACA, at least half of the initial retail sale licenses for cannabis were reserved for social equity applicants, defined as an applicant for a license at least 65 percent controlled by an individual whose household income was either 300 percent below the state median household income, or a resident of a disproportionately impacted area.

Disproportionately impacted areas refer to census tracts that either have a high poverty metric or rate of historical convictions for drug-related offenses, as determined annually. RERACA tasked the SEC with overseeing equity applicants and approving equity joint venture applications, which are not subject to the license lottery.

But the administration of the social equity applicant program has been controversial. When the first round of community reinvestment funds, generated by cannabis license fees from non-equity applicants and directed by RERACA to be reinvested in disproportionately affected areas, was approved for distribution in 2024, media reports of impropriety soon followed.

The SEC outsourced the decision making process over how the funds would be awarded to six nonprofits, but critics said there was no clear criteria in how the funds were awarded and charges of favoritism and abuse of the process soon followed. Gov. Ned Lamont asked state comptroller Sean Scanlon to investigate, and a final report found the SEC failed to provide adequate guidance and communication to applicants, as well as other issues, including failure to provide bid documentation.

Owners of equity joint ventures have also taken issue with a provision in RERACA that prevents them from selling their ownership stakes for seven years, arguing it limits their responsibility to respond to a fast-changing industry, including preventing them from disinvesting from a struggling business or profiting from one that’s succeeding. Social equity applicants are prohibited from selling ownership to anyone other than another social equity owner for three years, with certain exceptions, such as the death of a backer.

Separate legislation, which the General Law Committee advanced, would codify those time frames but allow the SEC to adopt regulations creating exemptions in certain circumstances.

Limited information about cannabis ownership is currently available. While CT Open Data contains several datasets listing cannabis applications, which include a complete list of establishments licensed by backers, that information is only for the initial application. More detailed information about ownership interest and shares is not public, nor are any changes made to ownership after an initial application is approved.

Critics of Connecticut’s cannabis regulatory scheme have alleged that red tape has led to consolidation in the industry, favoring big business and creating barriers to entry for smaller operators. Without publicly available ownership stake information, it’s difficult to accurately gauge the degree to which this is a problem outside first-person testimony.

But there are indications that consolidation, to the detriment of RERACA’s intentions, is happening. In one case, attorney general William Tong’s office found that three licenses operating under the Crisp Cannabis brand violated RERACA’s material change filing notice and engaged in a practice known as “gun jumping,” or prematurely transferring operational control and beneficial ownership to Mohave CT, LLC, which was seeking to acquire the brand.

“Evidence showed that the acquiring entity assumed decision-making authority and coordinated the operations, branding, and staffing of three separate cannabis establishments for more than 100 days before notifying regulators. This alleged coordination effectively eliminated the licensees’ competitive independence, consolidating them into a single enterprise before the Attorney General’s merger review could occur, in violation of RERACA’s notice and waiting-period requirements.” Tong’s office said in a press release from January 2026.

The investigation also found companies violated the state’s antitrust and competition laws by exchanging “competitively sensitive business information,” including pricing data, in violation of the state’s antitrust act. Under settlement terms, the companies paid a civil penalty of $416,000 and will be monitored for compliance by Tong’s office for three years.

But Tong’s office has concerns with the proposed changes in HB 5350 that would make ownership changes public.

Elizabeth Benton, a spokesperson for the attorney general’s office, previously told Inside Investigator they had concerns about releasing “competitively sensitive information used to complete our antitrust reviews and are working with legislators to address those concerns while balancing the public’s interest in this market.”

Inside Investigator also reached out to the SEC and several cannabis industry groups for comment about the proposed public records change in HB 5350, but did not receive a response.

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