Members of the Social Equity Council, which oversees the social equity portion of Connecticut’s new marijuana industry, raised concerns over how to distribute millions in community reinvestment funds after Executive Director Ginnie-Rae Clay presented a timeline for evaluating and approving potential grants.
The community reinvestment pilot program sends a portion of cannabis sales tax revenue back to communities that have been disproportionately affected by the war on drugs. In 2023, the SEC distributed $6 million to various third-party organizations to administer grants. The SEC is already preparing for the 2024 distribution, but some members raised issues over timing of the plan and criticism that had been leveled over 2023’s distribution.
Council member and chair of the SEC’s Reinvestment and Workforce Committee Ojala Naeem said she was concerned about the timeline for approving the grant-making organizations or even distributing the funds through those third parties or if the council could have a bigger impact through an alternative approach.
“I think this timeline is based on reinvestment funds being dispersed to grant makers and I do not feel comfortable saying that is one hundred percent the direction that we’re going to go in,” Naeem said. “I have heard concerns in the approach that we have used and that’s why I want to make sure we have the space and ability to discuss it.”
Councilman Michael Jefferson, however, said he was concerned about missing the June deadline for distributing the money through various time extensions and delays.
“I do not want to see this money rolled over back into a fund that we no longer control. This money is for our sole, discretionary use,” Jefferson said. “I just get sick and tired of us reinventing the wheel. We have a plan. That’s why we have a pilot program.”
“Up to this point, I haven’t heard any complaints about it,” Jefferson continued. “It works well. If it continues to work well, we simply use the same grant makers and move forward and get this money back into the hands of our community.”
“As chair of the committee, I have heard feedback from all across the board in terms of what works well, what’s challenging and what might work well for us to do differently,” Naeem said. “I want to make sure we have those conversations and give those concerns the appropriate due diligence before setting anything in stone.”
Jefferson reiterated that he wanted a set timeline for the end of discussions and that if a grant-maker needed to be replaced, they can consider that, but the council should not punish the other grant makers over the concerns about one.
“Let’s move forward on this. This is reinvestment, they [the public] expect us to do our due diligence to the money back in their hands,” Jefferson said. “We now sit on an account with $31 million for our sole discretionary use. We have control over that, and we have to take advantage of it. We have to get this money back into the hands of our community.”
Executive Director Clay said the timeline for reviewing and approving grant makers was “not set in stone,” and some members questioned whether the SEC should approach the Department of Economic and Community Development (DECD) about a possible alternative plan, so they have options.
Clay said that she could offer a more detailed plan, and that the timeline was only a general overview. “The issues that folks have brought up, their concerns making sure we’re looking at leveraging other programs out there, we’re also looking into that.”
The previous distribution of $6 million to grant making non-profits like the United Way and the Hispanic Federation, was largely focused on prisoner re-entry programs, youth programs and expanding the workforce.
According to the executive director’s presentation, the same six organizations that received equal $1 million shares of reinvestment money in 2023, have received 267 grant applications totaling $19.3 million. The money is distributed at the end of the fiscal year after the SEC holds discussions over the best way to allocate it. As part of the law, 65 percent of cannabis sales tax revenue goes to the SEC to be redistributed to communities affected by the war on drugs.
Retail sales of cannabis in Connecticut have taken off, surpassing medical marijuana sales in May and growing ever since, according to the Department of Consumer Protection. But, according to a report by CT Insider, tax revenue has been below expectations, with only $4.7 million in revenue coming to the state, roughly $3 million less than expected.
However, as sales climb and the industry grow DRS Commissioner Boughton said he expects the revenue to the state to increase as well.
Andrea Comer said the Finance Committee will be meeting later this month to get a better handle on how much money is available for community reinvestment.
“If we look at the funding that came through from ARPA and then all these dollars that went into the community and now folks are suffering as a result of that money now no longer being available,” Comer said. “My hope is that as we put this money out into the community, we are doing so in a way that is mindful so that we don’t leave them in a lurch once those funds run out.”
“I just don’t want to leave communities worse off if we just put a flood of money into those communities and then it’s gone,” Comer continued. “I just don’t want to do more harm than good.”
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