Bridgeport company seeking cannabis cultivator license sues, arguing state erred, lied, in application process

A Bridgeport-based company sued the state Friday, arguing it had been erroneously denied a license to cultivate marijuana.

A Bridgeport-based company sued the state Friday, arguing it had been erroneously denied a license to cultivate marijuana.

Associated Press / Associated Press

BRIDGEPORT — A Bridgeport-based company seeking a license to cultivate marijuana sued the state Friday, arguing officials harmed the business by providing inaccurate information and erred in denying its application.

In the complaint, Nautilus Botanicals LLC. sought to reverse a decision by the state’s Social Equity Council, a committee formed to ensure the state’s fledgling adult-use cannabis program is “grown equitably” and oversee as funds from the initiative “are brought back to the communities hit hardest by the ‘war on drugs.’”

Among other claims, the company, represented by attorneys Sarah Westby and Patrick Fahey of Hartford-based Shipman & Goodwin, alleged the council judged its application based on criteria published after it had been submitted and misunderstood the ownership structure of the company, prompting the rejection.

According to the complaint, Luis Vega, who operates a licensed hemp manufacturing facility in North Haven and manages 300 acres of hemp farmland in Shelton, owns 65 percent of the company, while three other investors split the rest.

Vega also serves as the chief executive officer, running operations on a day to day basis along with two other “managers” designated in the company’s organizational chart.

The council, in rejecting the company’s application, said that the other managers had the power to remove Vega, designated as the “social equity applicant” for the state’s review process, from his position, according to the complaint — a violation of the “control” requirement for the program.

“This conclusion erroneously misstates and misinterprets the provision for removal of a manager,” said Westby and Fahey. “The (social equity applicant) holds 65 percent of the membership interests and thus the SEA’s vote is required to remove a manager, including removal of the SEA himself. In other words, the SEA has the power to veto any attempt to remove himself as a manager.”

The requirement was added after the company submitted its application, the suit alleges, which was partway through the state’s 90-day review period.

The suit also alleges that, as the council began reviewing applications, an official said they would be considered on a rolling basis, rather than at the end of the review period.

Based on this guidance, as well as the seeming likelihood of approval based on Vega’s roots in the industry, Nautilus Botanicals began to rent a space for cultivation in March, attorneys said.

So far, the company has spent $250,000 on rent, according to the suit.

The suit seeks to reverse the council’s rejection of Nautilus’ application, as well as costs and damages and any relief deemed appropriate.

Two Hartford County-based businesses also challenged their denials for cultivator licenses this week.

The companies filed separate lawsuits in state Superior Court seeking to reverse rulings by the Social Equity Council that they did not meet ownership requirements set forth for so-called social equity applicants.

In the complaints, The Hartford Cannabis Company and The Good THC Co. also argued that the Social Equity Council’s decision was “arbitrary and capricious” and that the council made erroneous assumptions and conclusions about voting powers and control.

A spokesperson for the Attorney General’s Office, which is representing the state, had no comment on the complaints filed earlier this week.

They did not immediately respond to requests for comment on Nautilus Botanicals’ suit Saturday.; reporting from Julia Bergman is included in this story