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While the 2018 Farm Bill legalized CBD with 0.3% THC concentration or less at a federal level, Connecticut passed its own laws to legalize hemp-derived CBD products on May 9, 2019.[1]Office of Legislative Research. “State Laws on Retail CBD Sales“.Accessed on December 6, 2023. In doing so, Connecticut signaled it was open for business to CBD entrepreneurs searching for new markets. However, while Connecticut is a CBD-friendly state, businesses must get a CBD license and follow the region’s rules and regulations to avoid financial or criminal repercussions.
This guide explores how to start a CBD business in Connecticut, how to obtain a Connecticut CBD license, the rules and regulations for selling CBD products in the state, and other related topics. Continue reading if you want to learn more about how to start a CBD business in Connecticut!
How to Start a CBD Business in Connecticut
You must set up your new business before selling CBD products to Connecticut consumers. Fortunately, the primary stages of starting a new CBD business resemble starting any other enterprise within the state — there’s no special process for a cannabidiol business. But first, you must decide which business structure is best suited to your new CBD company. While many CBD entrepreneurs choose LLCs to reduce liability exposure, you have various options including Limited Partnerships, General Partnerships, and more.
If your business opts for an LLC, you need to obtain a registered agent and file your Certificate of Organization. While there is a paper filing option, it’s most simple to register your business on the Connecticut government website. After receiving confirmation that your business is registered, it’s time to apply for an Employer Identification Number (EIN) from the IRS. Not only does this register your business with the IRS and allow you to employ staff members, but it also ensures there is a standardized number associated with your business (it makes it easy for creditors, banking providers, and others to identify your business).
Next, apply for a business bank account. Obtaining a business bank account for your CBD business is the first step in establishing a business credit score. As you build a credit profile, it will benefit from improved access to vendor credit, loans, and more.
After you select a business structure, register your business, obtain an EIN, and apply for a business bank account, it’s time to explore the CBD-specific requirements for entering the industry!
How to Get a CBD License in Connecticut
While many states require CBD retailers to obtain licenses and permits to sell CBD products to consumers, Connecticut isn’t one of them. Instead, Connecticut simply requires CBD retailers to sell legally sourced CBD products with 0.3% THC concentration or less. This makes Connecticut one of the most attractive states for opening a new CBD enterprise.
However, while CBD retailers don’t require any licenses or permits to start selling CBD products, businesses producing hemp for CBD products must obtain a Connecticut Hemp Producer License, (which lasts for three years). In 2022, there were 78 licensed hemp producers, and their average lot size was 0.59 acres.[2]Connecticut Department of Agriculture. “Connecticut Hemp Program“.Accessed on December 6, 2023.
Let’s explore the basic fee structure in more detail below:
- Hemp Producer Application Fee (Nonrefundable): $50
- Hemp Producer Licensing Fee: $450 for the first acre, $30 per acre after the initial acre (the maximum license fee is $3000)
- Site Modification Fee: $30 for each additional acre
To apply for a Connecticut Hemp Producer License, head to the State of Connecticut’s eLicense website, register an account, and begin the application process. This digital application portal makes applying to be a licensed hemp producer simple.
CBD License Application Requirements for Connecticut
Again, while Connecticut does not require a retail CBD license to sell CBD products, businesses producing hemp for CBD products must obtain a license. The hemp program license requires the following information:
- SSNs
- FEIN of entities
- Applicant’s business address
- Personal details of the applicant
- DOB of the applicant and key participants
- Home address for applicants and key participants
- Personal details of key participants (the officers of the entity)
Collecting all of the above information before applying for a Connecticut Hemp Producer License will help your business avoid delays during the application process. Likewise, the applicant and the key participants must undertake a criminal record check as part of the application process—applicants and key participants are not permitted to have any felony convictions related to controlled substances in the last ten years.
Laws & Regulations for Selling CBD in Connecticut
Connecticut’s laws and regulations follow a similar path to the restrictions outlined in the 2018 Farm Bill. CBD products must be hemp-derived, meaning they must come from cannabis plants with 0.3% THC concentration or less. Likewise, the CBD product itself must have a 0.3% THC concentration or less. Otherwise, there are no significant restrictions on sourcing or selling CBD products. CBD products sold by retailers do not need to originate from a producer in Connecticut as long as they are legally sourced.
As the CBD industry continues to evolve, staying on top of the latest Connecticut CBD laws and regulations is essential. For example, there are fears that a proposed bill in Connecticut may impact the state’s CBD industry. While the bill’s primary focus is preventing synthetic THC products from being sold within the state, hemp farmers also believe it will impact CBD products.[3]CT Insider. “CT hemp farmers say the proposed bill would ‘cripple’ the CBD industry“. Accessed on December 6, 2023.
How to Renew Your CBD License in Connecticut
As there is no requirement for a CBD retail license in Connecticut, there’s no need to renew any permits to continue selling legal CBD products within the state. However, businesses producing hemp for CBD products must renew their Connecticut Hemp Producer License to continue operating as a business. Fortunately, the license lasts for three years, so you won’t need to renew it annually. And once your license expires, you must renew the license on the State of Connecticut’s eLicense website. Log into your business’s account and follow the instructions for renewing your license.
Start Selling CBD in Connecticut
With CBD continuing to grow in popularity, entering the market in its early stages may place your business in a position to capitalize on this thriving industry. Connecticut has more than 2.8 million adults, making it an attractive option for CBD entrepreneurs.[4]United States Census Bureau. “QuickFacts Connecticut“. Accessed on December 6, 2023. Use the advice in this guide to set up your business and apply for a Connecticut CBD license to ensure that your business operates legally. Additionally, it’s always important to check state authority regulations, as local CBD laws are subject to change.
Once your business’s foundation is in place, it’s time to start developing a sales strategy. Some CBD businesses in Connecticut sell products online, while others use brick-and-mortar storefronts. Fortunately, you don’t have to choose between these two options if you want both.
By securing a CBD merchant account, you’ll gain access to credit and debit card payments from your customers, and receive higher chargeback thresholds, better processing rates, enhanced security features, and dedicated account support!
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CBD License: FAQs
Is CBD legal in Connecticut?
Cannabis and CBD products grown from hemp are legal in Connecticut. [5]CT.gov. “Adult Use Cannabis in Connecticut“. Accessed on December 6, 2023.. Residents can buy and use CBD products with less than .03% THC.
How much does a CBD license cost in Connecticut?
Retailers do not need to obtain licenses to sell CBD products in Connecticut, so there is no cost for a retail CBD license. However, there are costs associated with a Connecticut Hemp Producer License:
- Hemp Producer Application Fee (Nonrefundable): $50
- Hemp Producer Licensing Fee: $450 for the first acre, $30 per acre after the initial acre (the maximum license fee is $3000)
- Site Modification Fee: $30 for each additional acre
Can you sell CBD without a license in Connecticut?
Yes, retailers can sell CBD products without a license in Connecticut. There are no restrictions on retailers selling legally sourced CBD products as long as the THC concentration is 0.3% or less, as per federal restrictions. Additionally, unlike many other states, Connecticut does not require CBD retailers to acquire products from within the state.
How long is a CBD license valid in Connecticut?
Connecticut does not require retail businesses to obtain CBD licenses as long as merchants only sell legal CBD products. However, for hemp producers, the license lasts for three years. You must renew this license after three years to continue producing hemp for CBD products.
