Cannabis entrepreneurs need big-money backers to launch their careers

A conviction for growing and selling marijuana at age 30 cost Luis Vega his white-collar job, his marriage and living full-time with his two children.

It cost him his freedom too. He served a year in prison and eight years of supervised release.

Now 39, the Bridgeport resident proudly says aloud: “I’ve been growing weed since I was 16. I can say that now.”

Vega owns Nautilus Botanicals, which has partnered with a New York City investment firm to seek permits for an outdoor cannabis cultivation operation on 6 acres of vacant land at 105 Stonington Road in Norwich and two adult recreational cannabis retail dispensaries, one in New Haven and one with a location not yet set.

The Norwich Commission on the City Plan is scheduled to hold a public hearing on the cultivator plan July 16.

Regulations governing the 2021 Connecticut law that legalized adult-use cannabis heavily favor so-called social equity applicants for cultivation and retail licenses sales outlets.

With educational and financial assistance provided through the newly created state Social Equity Council, disadvantaged residents would learn the ropes of the new industry, launch new careers, hire other people from areas impacted by the nation’s war on drugs and give back to those distressed communities, said Ginne-Rae Clay, executive director of the Social Equity Council.

Social equity applicants had to prove they grew up in a Disproportionately Impacted Area in the war on drugs or have lived in a “DIA” for at least five of the past 10 years. They also must have incomes no higher than 300% of the current median state household income for the past three years.

The U.S. Department of Housing and Urban Development household median income for Connecticut for 2023-24 was $69,255 for an individual and $133,184 for a family of four.

Vega, of Puerto Rican heritage, grew up in New York City and moved to New Haven at age 18 to attend college. He earned an undergraduate degree in business at the University of New Haven and a master’s degree in organizational management at Albertus Magnus College.

He also grew marijuana on the side to ease symptoms of his Crohn’s disease, selling some as well. He was arrested and convicted and sentenced to nine years in prison. He served about one year and last year finished his eight years of probation.

But he could not find a job. His wife divorced him and their two children, a daughter, 13, and son, 11, live with her in Hamden.

Formerly illegal growing experience now a plus

He turned to his family heritage for a different way to make a living. His father was a mechanic, his grandfather a farmer in Puerto Rico. The 2018 Connecticut farm bill legalized industrial hemp growing.

Vega started a 10-acre hemp farm in Shelton, WEPA! Farms, which opened in 2019. The farm produces CBD extract products from the hemp plant, industrial fiber products and construction blocks made of hemp.

At the time, Vega said, he was the only Latino among the 65 recipients of state hemp licenses.

Now, Vega’s résumé and hemp-growing experience make him a valuable business partner in the state’s frantic rollout of the new cannabis law. The financiers are valuable to him too.

Vega and dozens of other social equity applicants could not afford the state cannabis licensing fees for the various categories of licenses. Fees to enter the lottery ranged from $125 to $500. But if they are successful, applications needed license fees ranging from $25,000 to $75,000 ― half for non-social equity applicants.

Additionally, applicants must pay fees of $1 million for a hybrid retail cannabis facility; $3 million to convert a medical retail facility into a hybrid medical-recreational and $3 million for a cultivation facility. All those fees are cut in half for social equity applicants.

On New York City’s financial scene, Merida Capital Holdings was preparing for Connecticut to legalize adult-use recreational cannabis. Five years ago, Merida formed a social equity program for cannabis, said company representative Connie DeBoever, who is working with Vega as its social equity applicant in Connecticut.

By partnering with a social equity applicant, Merida and other large cannabis firms could increase their chances of obtaining a limited number of licenses and cut the application and license fees in half.

Merida interviewed some 200 minorities interested in partnering with the firm on potential cannabis enterprises in Connecticut. Vega stood out, DeBoever said, especially with his experience as a hemp farmer.

“We knew he met our criteria. We knew his passion for cannabis,” DeBoever said.

Vega said Nautilus Botanicals just received permits for the planned New Haven retail store, to be located three blocks from his former home. He hopes to open in September. He would like to open the Norwich cultivation business by fall and harvest its first crop next summer.

Vega plans to hire 120 workers in all, 40 at each location. He’s pledging to hire most of the cannabis cultivation workers from the Norwich area. His longtime friend Mike Falade of Preston is his grower. Falade has worked with Vega at his Shelton hemp farm.

But despite all the work, Vega has yet to see a paycheck from his cannabis endeavors.

“When I started this, I had $7.99 to my name, and I still have $7.99 to my name,” Vega said, “but hopefully in a year or two, we will be able to help put food on the tables of a lot of people’s lives. And the goal is to help the community and uplift those around us.”

Norwich Zen Leaf social equity licensee still waiting for dividends

Unlike Vega, Brittany Hart, 37, had no background in cannabis. Hart majored in Spanish and theater in college and “was not a pot person” when she by chance fell into the cannabis business. She is the social equity applicant for multi-state cannabis conglomerate Verano Holdings’ Norwich Zen Leaf cannabis retail dispensary at 606 W. Main St.

But like Vega, Hart has yet to draw pay from the operation, although the store opened a year ago next week. Hart, who now lives in Wethersfield, works full time as a recruiter for the Lego Group.

Connecticut law requires social equity licensees to own at least 50% of the Connecticut operation and to control 65%, with hiring and firing authority and decision-making duties.

Hart said the Norwich Zen Leaf still needs to pay off its extensive renovations to the Norwich store and recover other start-up costs. She checks in on the operation regularly.

Hart called her foray into Connecticut cannabis “a wild experience.” She knew nothing about the industry or the state’s new process when Laurie Zrenda, the mother of her college roommate and a medical marijuana pharmacist, started recruiting potentially qualified social equity applicants.

Zrenda had got to know the industry when she opened one of the state’s first medical cannabis dispensaries in Uncasville in 2013.

Zrenda referred Hart to Verano, and the Chicago-based company guided Hart through the complex application process.

Hart relied on her own mother to help her prove to the Social Equity Council that she grew up in New Britain, a designated Disproportionately Impacted Area in the war on drugs.

“I sent everything I had: school records, report cards, things that had put me in the place there,” Hart said. “It is very hard to prove you were a kid somewhere. I sent the deed to my parents’ house. Weird random stuff. It worked. Bless my mother for keeping all that stuff.”

Zrenda now is Hart’s employee working at the Norwich Zen Leaf store. But she has her own cannabis business plans.

Zrenda sold her Uncasville store in 2019 to The Botanist, and now plans to open a hybrid medical-recreational cannabis dispensary in East Lyme. She will manage the store and own the building at 15 Colton Road in the East Lyme Industrial Park off Interstate 95’s Exit 71.

Flipping the script a bit, Zrenda sought an investor partner rather than the reverse. She interviewed company representatives and was impressed with Massachusetts-based Soulstar, an all-women-owned cannabis company with the slogan: “Cannabis for People by Cannabis People.”

Zrenda declined to identify the social equity licensee for the project. She said the woman is a relative by marriage who grew up in Groton. But the woman works in another business not yet aware of her cannabis venture.

Although the store will be hybrid medical-recreational cannabis, Zrenda hopes to restore an emphasis on service to medical cannabis patients. She said she misses the close relationships she developed with former customers at the Montville medical dispensary and hopes they find her again.

“Since recreational cannabis started, medical has dropped the ball,” Zrenda said, “They cater to recreational and don’t offer the same services (to medical customers). I really feel they’ve been left behind. I’m hoping a lot of my old customers will remember me.”

c.bessette@theday.com