THC company backed by state investment can no longer sell product in Connecticut

A hemp-based THC product company that received a $1.25 million investment from a quasi-public venture capital agency in Connecticut remains unable to sell its products in the state’s legal cannabis market, according to state regulators.

The company, called 1906, sells tablets and tablets containing THC, the psychoactive substance found in both hemp and marijuana, in dozens of states across the country, according to its website. Connecticut, which allows the sale of cannabis on regulated markets, is not among those states that have introduced restrictions on other types of THC products.

This is a notable difference considering that 1906 received $1.25 million in 2022 from Connecticut Innovations Inc., a quasi-public state agency that owns a stake in the company.

These products are federally legal under the 2018 Farm Bill, which allows the sale of hemp products with up to 0.3% THC on a “dry weight basis.” This law helped create an industry that sells legal and largely unregulated products that have effects similar to traditional cannabis.

However, there were two regulatory barriers in Connecticut in 1906. Part of the problem stems from a law passed last year by state policymakers who viewed hemp-based products as exploiting a loophole in Connecticut’s legal cannabis law and evading carefully crafted regulations. is emitting.

These replaced federal dry weight limits with limits on the number of milligrams of THC in hemp-based products per serving and per package. The change effectively reclassified all high-THC products as marijuana in Connecticut, relegating their sale to state-licensed dispensaries.

Another issue is rooted in Connecticut’s cannabis regulations, which limit the sale of cannabis pills, capsules and tablets to the state’s medical cannabis market. This rule has been in effect since October 2021.

It was unclear Friday whether 1906 products were sold in Connecticut before last year’s change in state law, or what the company’s plans are for its future in the state. Peter Barsoom, the company’s CEO and co-founder, did not respond to an email seeking comment left by CTNewsJunkie this week.

But in a Monday report by CT Insider, Barsoum sounded optimistic that Connecticut might reconsider some of its current policies.

“As you know, pills and tablets are not (yet) allowed in the adult market,” he said, according to CT Insider. “That means 1906 is not yet available in legal pharmacies.”

This situation leaves recipients of state funds on an uncertain path to operating in Connecticut. Lauren Carmody, chief marketing officer for Connecticut Innovations, said this week that investments come with risks, when asked if it was too early to invest in the company.

“Venture investing involves taking calculated risks, and we invest in them early on, when they can have the greatest impact and the most potential for return,” Carmody said in an email. We will do that.” “We invested in his 1906 because they are an established brand with the ability to scale. We also look at syndicates when we invest, and 1906 We had strong investors with a wealth of knowledge in the field.”

“[T]They are facing regulatory issues that are impacting their ability to manufacture and sell in Connecticut (and grow jobs here), but they hope that will be resolved in the future. ” she said in another email.

But Connecticut’s investment in companies with operations in multiple states is expected to grow in 2022, among advocates who want cannabis business licenses granted to local businesses owned by residents of communities adversely affected by the war on drugs. I frowned.

During an April 2022 webinar, Jason Ortiz, executive director of Students For Sensible Drug Policy, peppered Barsoom with questions about his plans to apply for a license to operate in Connecticut.

“If I apply for the same lottery license, you can put in 1,000 lottery tickets and I can put in 10,” Ortiz told Barsoom. That’s ridiculous. ”

At the time, Rep. Anne Hughes, an Easton Democrat, said 1906 “jumped the line” with the help of a seven-figure investment from a quasi-public entity. Almost two years later, 1906 has not been selected for a license to sell or manufacture cannabis products in Connecticut.

In an interview Friday, Hughes said the company’s regulatory problems are cold comfort for local companies still struggling to raise enough capital to enter the market.

“It would be great if CT Innovations could show that kind of generosity, so to speak, to local entrepreneurs who are trying to get up and running and building their businesses,” Hughes said.