The state of Connecticut invested in the Weed Company in 1906

Connecticut Innovations, the state’s parastatal investment capital arm, has invested in a Colorado-based marijuana retailer called 1906, a specialist in fast-acting edibles, and is expanding into Connecticut. However, cannabis activists and potential entrepreneurs in the state do not support the investment, considering it a cash donation from the state to an already established multi-state organization while aligning with state social justice rules and competing for a limited number of licenses.

In February of that year, 1906, the company invested $1.25 million, according to a statement from Lauren Carmody, vice president of marketing and communications at Connecticut Innovations. The transaction was part of Connecticut Innovations’ third round of equity funding totaling $33.4 million through 1906 since 2017.

Cannabis entrepreneurs are reacting to the investment

However, Connecticut Innovations’ investment sparked a heated exchange between 1906 CEO Peter Barsoom and former Minority Cannabis Business Association president Jason Ortiz on an online forum hosted by Arcview.

In the conversation, Peter Barsoom began by saying that he has yet to submit his application for a Connecticut cannabis license, but he intends to apply for multiple licenses.

Although his organization would only qualify for the more expensive general licenses. Connecticut law allows in 1906 to merge with social justice applicants and possibly take over some of the social justice sites.

Ortiz explained that under no circumstances should money from Connecticut’s legalization system be used to help out-of-state people get licenses. He added that if he were applying for the same lottery license, it was quite ridiculous in the sense that they could afford to enter a thousand lottery tickets. He can only tell ten that they will use Connecticut’s innovation funds to force him out.

Carmody, on the other hand, believes that Connecticut Innovations’ investment is a declaration to the market that they are willing to put money into cannabis and that 1906 has established a presence in Connecticut through filing with the Secretary of State’s office.

Carmody explained that this is not a one-off situation and that it gives them an opportunity to further investigate the cannabis business and increase their investments. It’s the first of many for us, he added.

The battle for marijuana licenses is intense, with just 56 licenses available for a variety of marijuana-based services. The Department of Consumer Protection has received more than 3,000 social justice license applications and more than 1,600 general license applications.

Those who applied will later be subject to a lottery to decide who will receive provisional approval to begin producing, selling or distributing recreational cannabis within the state.

Although much of the language in the enabling measure focused on equality for populations disproportionately disadvantaged by previous marijuana regulations, some argue that the law still favors larger, more established cannabis companies and those who grow cannabis for medicinal purposes.

Because the odds are so slim, the thought that Connecticut’s venture capital arm would be pouring money into a non-state company with ambitions to get licensed is unnerving.

When asked for comment, Ortiz said, “It had become very clear that Governor Lamont never intended to allow anyone but his wealthy friends to own the entire cannabis market.” He used the suffering of poor communities to pursue another avenue creating for the very wealthy to own everything in Connecticut, right down to programs designed exclusively for working-class families, Ortiz added.

According to Carmody, Connecticut Innovations views the issue solely from an investment perspective, observing the management team, ability to create jobs and potential to generate a return, and 1906 ticked all three boxes.

Carmody also said they are evaluating it from an investment perspective and have found that there is more potential there. He said this is just the beginning for them, not the end, and they want to explore it further.

With the exception of social justice claimants and cannabis activists in Connecticut, the law in its current form is causing more resentment and injustice for individuals trying to enter this growing market. Ortiz said that watching the whole situation was pretty disgusting.

What led Connecticut Innovations to invest in 1906?

In a statement, Lauren Carmody, vice president of marketing at Connecticut Innovations, said that Connecticut Innovations’ investment recognizes the growing importance of the cannabis business to the state’s health, economy and social development, alongside their belief in the future potential of 1906.

Along with its history of success and innovation, 1906 is an excellent addition to Connecticut Innovations’ growing portfolio.

The investment will help accelerate the company’s ambitious expansion plans and establish 1906 as a pioneer of many of the Connecticut-based marijuana industry leaders.

The investment decision was prompted by the Company’s leadership position as the number one marijuana pill maker in the United States, coupled with its commitment to health, employment, wellness and social justice, and its successful revenue generation capability Connecticut innovation team.

The investment is consistent with Connecticut Innovations’ mission to promote innovation and diversity in the state, and supports efforts to focus on public health, public safety, equity and social justice.

bottom line

Connecticut Innovations’ investment in 1906 is a significant milestone for the cannabis sector, and institutional investors no longer need to wait for changes in federal regulations before investing in the cannabis market (or financing the expansion of the industry); said the CEO of 1906, Peter Barsoom. Connecticut Innovations’ investment will help 1906 grow its business in the state, and will place 1906 at the perfect time at the epicenter of the Northeast’s cannabis boom.

The arrival of 1906 and its products in Connecticut is pretty exciting (at least for the company), despite the disapproval of the state’s cannabis activists and business owners.