CT Cannabis Producers Expect More Challenges Due To State Regulation

It has been two and a half years since the state allowed adult-use cannabis to be legally sold, but while the industry is thriving in surrounding states, it is stagnating in Connecticut, experts say.

According to May sales figures from the Department of Consumer Protection (DCP) for both adult-use and medical marijuana in the state, adult-use sales totaled $18.7 million and medical sales $6.5 million.

The value of medical marijuana sales has been continually dropping, from a high of $12.5 million in March 2023, and adult-use sales have been limping along.

Since Connecticut began legal adult-use sales in January 2023, the state has collected just under $70 million in tax revenue from adult-use sales, while sales of medical marijuana are not taxed in the state.

Massachusetts started adult-use sales in 2017-18 and to date has collected $1 billion in tax revenue.

Furthermore, Connecticut saw its first major cannabis brand exit the state market in June, when New York-based Acreage Holdings sold off its three “Botanist” dispensaries to Connecticut-based BUDR.

While Acreage never gave a specific reason for leaving the Connecticut market, many experts and cannabis business owners say it was because of the challenges and overregulation facing their industry in the state, a view shared by Erin Gorman Kirk, Connecticut’s own Cannabis Ombudsman.

Rino Ferrarese, CEO of Affinity Grow, a micro-cultivator cannabis operation headquartered in Portland, CT, gave public testimony during the legislative session earlier this year on his concerns over proposed changes to cannabis sampling and testing.

Days after his testimony, his company received a surprise visit from agents from the DCP, which oversees the adult-use and medical-marijuana industries in the state.

The DCP commissioner eventually had to issue a public apology for what was described by many as a “retaliatory inspection” against Ferrarese after he spoke up.

Previously the industry was guided by the Responsible and Equitable Regulation of Adult-Use Cannabis Act (RERACA).

Ferrarese said in an interview that he and many other cannabis growers and producers entered the 2025 legislative session with optimism, but that faded by the end of the session.

“In the beginning of the session, I think the goal was to finalize the policy and procedure manual, which was basically the draft of the rules that would run the program,” he said.

“In that document, basically it gave DCP the authority to create regulations – I don’t want to say on the fly, because that’s not the right word – but basically they could revise the regulations as needed.”

But under the new bill, DCP can codify rules and regulations about the cannabis industry that would allow them to tweak and make changes as they see fit, without having to go back to the state legislature.

Ferrarese said this seemed like a smart thing to do initially, as nobody could have anticipated the kinds of details and issues that would come up way back in 2020, when the state was talking about the legalization of adult-use in the state.

He added, however, that there was also language in the “policies and procedures” part of the bill that didn’t make sense or was impractical, which ultimately led to it being “rejected without prejudice” by the legislature, leaving the door open for DCP to submit revised plans for consideration by the state’s Legislative Regulation Review Committee.

Ferrarese said he is disappointed that there are not more positive stories about the cannabis industry in the state but concedes that is a problem that has been created by the state regulator.

“DCP, they’re always looking for new ways to improve and they are open to suggestions and, you know, we’re in constant contact,” he stated.

“Bad things about the program: I think that we are extremely overregulated. We are far more regulated than alcohol, and cannabis is not toxic. And you can’t kill yourself with cannabis. Yet we see rules applied to the cannabis program that are not applied to alcohol. I’m not saying for anybody to go after the alcohol guys, but we just had Connecticut impose hours of operation on dispensaries. So now we are closed before everybody else.”

Starting July 1, 2025, Public Act 25-166 prohibits any retailer, hybrid retailer or micro-cultivator with a retail outlet from undertaking business on Sunday before 10 a.m. or after 6 p.m. and on weekdays and Saturdays before 8 a.m. or after 10 p.m.

Ferrarese pointed out that these hours affect medical marijuana patients as well as adult users, meaning buyers will just go elsewhere during those times.

“You’re going to just hop in your car and drive to Mass. I heard Rhode Island has this dispensary that’s open until 1 a.m.”

Mother Earth Wellness in Pawtucket, RI, which has a drive-thru, is one of the only dispensaries in New England that does indeed stay open until 1 a.m. on Thursdays, Fridays and Saturdays and is open until 11 p.m. on other days.

Even with the news that the state will allow increased THC limits for concentrates, from 60 to 70%, and cannabis flower, from 30 to 35% — which are aimed at stimulating more sales not just for medical patients, who prefer higher THC levels, but also for general adult-users — Ferrarese is cautious.

He said that cannabis flower that is over 29.99% THC by weight previously had to be registered as medical marijuana in the state, which is unique to Connecticut.

And with that came a different set of testing standards, known as “stability testing protocol,” not only during production but also 30 and 60 days after production, when the product is out for sale.

Ferrarese said this can cause problems, as cannabis plants are known to have up to a 20% variation in THC, even on the same bud. He explained: “So now imagine you have a medical marijuana flower in Connecticut. If you test it for potency, it comes back as 30% THC. Well, on day 30, you have to retest it, so it better come back plus or minus 10%. So it needs to be between 27 and 33% THC. If not, you have to initiate a product recall.”

And that, he said, can have disastrous effects on a business, as a recall can cost tens or even hundreds of thousands of dollars and result in the potential loss of customers and damage to a business’s brand, not because the product is necessarily unsafe but because it tested outside of DCP’s THC parameters.

Cannabis giant Curaleaf found itself in this situation earlier this year, when they had to recall a product because it failed the 60-day stability test, with yeast and mold levels falling outside the “acceptable range,” despite the fact that it passed the initial lab test before going to market.

Ferrarese said he and other cannabis businesses will therefore have to carefully consider the risks and potential liability of producing products with higher THC levels.

Regarding the new THC-infused beverages now permitted for sale in the state, Ferrarese says they are another nonstarter for businesses like his because the operational costs to compete in this sector are just too great.

“We’re kind of behind the ball because a lot of these companies, they’re basically the micro breweries.”

On the future of Connecticut’s cannabis industry, Ferrarese noted that “total monthly sales between the medical plus adult use were around 18 million per month in early 2024. But since then, growth has stagnated.” He stated that “basically, it’s been the same monthly sales and we’re just seeing more and more operators entering the space, but we’re not seeing sales growing. And cannabis is an expensive business to enter.”

Another major cannabis player, Ayr Wellness, which has one dispensary in Manchester, is said to be considering leaving the Connecticut market, according to Ombudsman Kirk, because of the challenging business environment it faces here.

Ayr Wellness has repeatedly stated that it is “continuing to operate in Connecticut” but has not directly addressed whether it will stay or not, as the company continues to try to restructure debt totaling $620 million, according to the company’s financial report and balance sheet from December 2024.

Ferrarese says he is stubborn and wants to see the industry succeed here in Connecticut.

“The industry needs to come together and have a cohesive voice,” he said. “We’re kind of all sort of sharing the same objective, and that is to grow the best program in the country and to maintain and sustain it, and to sort of invest in it the things that are going to make us differentiate ourselves. And until that time, we’re just going to keep seeing more of the same.”