Ayr Wellness Enters Connecticut Early Through Social Equity Joint Venture

Ayr & a Hartford City councilwoman will be one of the first recreational cannabis growers in the state.

Connecticut Cultivation Solutions, a cultivating entity co-owned by a Hartford City councilwoman, won a provisional Disproportionately Impacted Area (DIA) cultivator license in Connecticut, making them one of the first cannabis growers allowed to participate in the upcoming adult-use market.

But the company didn’t do it entirely on its own. Connecticut Cultivation Solutions got some assistance from Florida-based Ayr Wellness (OTCQX: AYRWF).

Ayr partnered with Tiana Hercules, the majority owner of Connecticut Cultivation Solutions, to “bring its cultivation experience, knowledge and access to capital,” according to a news release.

“Having the opportunity to partner with someone like Tiana is one of the most rewarding parts of working in the cannabis space,” Ayr CEO Jonathan Sandelman said. “We’re grateful to be in a position to support her dream, while also expanding into a new state that seamlessly fits into our operating footprint.”

Hercules and 15 other applicants had provisional DIA licenses approved in July but had to wait for the state’s Department of Consumer Protection agency to review their background checks.

MSOs Getting In On Social Equity?

While most social equity programs are designed to assist smaller organizations with getting their feet in the door, large multistate operators often have found ways to also take advantage of the programs.

Connecticut’s program tapped CohnReznick, a third-party consulting firm, to review the social equity applicants.

These results then were given to the Social Equity Council without any identifying information, according to Hearst Connecticut Media. This was done to create a blind review process, and prevent personal knowledge of the applicants from influencing decisions.

Social equity applicants had to meet strict income requirements and own at least 65% of the cultivation business under state law. They also had to pay a $3-million-dollar nonrefundable fee, the highest in the country.

Hercules originally submitted a social equity lottery application to open a dispensary before deciding to try for a DIA cultivator license instead.

“Once I started to see the number of applications coming in and the resources by which someone had to have just to be able to have a statistical chance … that just started to seem less and less like an equitable process, so the cultivation opportunity was brought to me,” Hercules told the Hartford Business Journal.

Hercules said that provisional DIA cultivators can scale their businesses more than some other licensing types such as retail, she told the news outlet, adding that she could eventually go vertical by opening a dispensary alongside her grow facility using the help of equity joint ventures.

Ayr and Hercules have partnered on a handful of social justice and social equity projects throughout the state, the announcement said.

“(Ayr tries) to set a footprint on the community side of things — that showed me they were doing things a little bit differently than some of the other MSOs and really doing things intentionally in the places they go,” Hercules told the news outlet.

The company said those initiatives include providing support for the Bridge to Morehouse Program, which creates a pathway for Hartford based community colleges looking to transfer into Morehouse College, a prestigious historically black college or university.

The accord also includes partnering with the University of Connecticut School of Law, NAACP and Capital Community College to host a free expungement clinic.

“The experience they bring to the table in cultivation and access to capital are crucial to operating in a competitive landscape,” Hercules said.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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