Quasi-State Agency Invests in CT Cannabis Industry – NBC Connecticut
This could inject hundreds of millions of dollars into our economy when it comes to a large-scale operation, but it will take months, if not years, for recreational marijuana to reach that level.
Keeping tabs on who is investing in cannabis is part of the reason state regulators want a slow and methodical rollout.
This week we learned that a Connecticut quasi-public is one of the investors getting into the industry. But how – since the licenses have not yet been granted?
Lauren Carmody, vice president of marketing and communications for Connecticut Innovations, talked about it with NBC Connecticut’s Mike Hydeck.
Connecticut Innovations is a quasi public that invests billions every year and they recently made an investment in this marijuana industry.
mike hydeck“So recently you announced that there was a $1.2 million investment in a company called 1906. It’s a recreational marijuana company out of Colorado. Why was this company chosen ?”
Lauren Carmody“Well, actually, as part of the investment, they decided to move their headquarters to Connecticut. So now they’re at home in Connecticut. But what we liked about 1906, c is that we generally say that as the venture capital arm of the state, we “operate with a double bottom line. And what we talked about there is one, we’re investing for a return and two, we’re investing to create jobs in Connecticut. What we loved about 1906 is the potential to have both. So when we invest we look for a strong management team, we look for traction in the market, the ability to scale and also a strong syndicate of investors. Thus, 1906 doubled its turnover from one year to the next. And we’ve joined this round with other very strong investors who have experience in cannabis.”
mike hydeck“So one thing that I find curious is that Colorado is a huge state. Last year I think they generated something like $430 million in tax revenue. Why the hell would you want to go from a large state that already has the system in place to a small state that is still building one?
Lauren Carmody“If you talk to Peter, the CEO of 1906, he thinks the growth potential in the northeast is key. He thinks yes, it’s in Colorado, it’s been there. But he think the potential for growth is actually in Connecticut, and on the northeast corridor.”
mike hydeck: “So because Connecticut’s quasi-publics are notoriously opaque, very little oversight – can you explain what percentage of taxpayers’ money goes into this investment. I know, on the scale of all the investments that your quasi-public is doing, it’s a very small investment. But how is taxpayer money involved?”
Lauren Carmody“So what we do at CI is again when we invest, we get a return. We haven’t dipped into state money for a number of years. So , what we do is when we get a return, which is through an IPO or an acquisition, we then reinvest those dollars back into the startup startup. So, I mean, 1 $.25 million in terms of investment, but we haven’t cut state funding in a very long time.
mike hydeck“So you just take the money you’ve earned and reinvest it, it’s not taxpayers’ money, is it?”
Lauren Carmody“Not for this one, and not for a number of years.”
mike hydeck“How are you sure 1906 will get a state license? Because they still issue them. I mean, there’s a bunch of state licenses, whether it’s small growers or delivery, or whatever. What if they move here and they don’t get a license? Are you sure they’re going to get a license? And how could you be?
Lauren Carmody“So we’re definitely not sure. I’m not into the guessing game or the odds or anything like that. I haven’t even won a scratch ticket in my life, so we wouldn’t be playing these odds. And that investment wasn’t contingent on getting a license. So what happens is if they get a license, they can grow and grow a little bit faster “, the pace will be faster. But regardless of their license, they’ve been able to expand into other states by partnering with us, and they’ve already had such success doing it. So we hope that continues.”
mike hydeck“So their product, as it says on their website, if the deliverables are in states where it’s already legal, and you expect them to continue here – can they do it legally if they don’t get a license, I wonder.”
Lauren Carmody“So they would go a different route, they would find a partner, and that’s how they would continue to evolve. And they’ve done it in other states.”
mike hydeck“So speaking of partners, social equity is a very important component of Connecticut state law that surrounds cannabis. When it comes to sales, especially recreational sales, how do these kinds of things does it fit into the plan with 1906 when they’re not from They won’t know the neighborhoods in Hartford that have been exponentially impacted by the war on drugs. with state law?
Lauren Carmody“I mean, what’s happening here is they entered the general lottery, so not the social equity lottery, they entered the general lottery. So I mean, we We’ll have to see the results of that. And the good thing about that is that I’m not as familiar with the lottery side, just because that wasn’t part of our investment. We will reap the rewards if they get a license. But we wait and we invest, I mean, we invest in companies every day and we take calculated risks in companies. This is just one of the things we took this calculated risk for and hope to see the reward.
mike hydeck: “When do you think they will move here? Are they close to having a physical address here in Connecticut, or is it still in progress?”
Lauren Carmody“So they’ve established a presence in Stamford. We’ll also see the CEO move in here. And we’re expecting an immediate ramp-up, you know, like, as soon as they kind of get their land and get on with it.” They’ll be setting up in Stamford, so we’ll see a bit more. And if they get the license, it could expand to other parts of the state. At the moment, they’re in Stamford.