A study by the University of Connecticut found that the marijuana industry could generate between $784 million and $952 million in revenue in the state over five years. That would be enough to help jump start the state’s economic recovery from the pandemic, the study’s authors said.

Tuesday’s signing marks an end to years of failed efforts to legalize the drug after the state approved it for medical use in 2012. Years later, dispensaries were still fighting to open for business.

People of color have been disproportionately penalized for marijuana possession in Connecticut, which decriminalized the possession of less than half an ounce of marijuana in 2011. Black people in the state were four times more likely to be arrested than white people for possession of marijuana, according to a report published last year by the American Civil Liberties Union.

Under the new law, the smell of marijuana alone will no longer be legal grounds to stop and search people. Nor will the suspected possession of up to five ounces.

“The war on cannabis, which was at its core a war on people in Black and Brown communities, not only caused injustices and increased disparities in our state, it did little to protect public health and safety,” Mr. Lamont said in a statement last week, after the State Senate passed the bill.

“We’re not only effectively modernizing our laws and addressing inequities, we’re keeping Connecticut economically competitive with our neighboring states,” he said.

Polls have shown that Americans overwhelmingly support legalization, with one study from the Pew Research Center this year finding that 60 percent of adults believe marijuana should be legal for medical and recreational use, while 31 percent support legalizing it for medical use only.

The Connecticut bill had a chaotic journey through the legislature. Mr. Lamont had previously threatened to veto the bill over a late amendment by the State Senate, which would have given preferential status to retail license applicants with past records of selling or using marijuana. House members stripped the bill of the provision before passing it last Wednesday.

Debate continued to rage on the floor of the State Senate Thursday in the final hours before the bill was passed by a 16-11 margin. Legislators who pushed back on the bill criticized its “social equity” provision, which calls for half of retail licenses to be issued to low-income applicants, and raised concerns about addiction and crime.

But State Senator Martin Looney, a Democrat and one of the legislation’s sponsors, argued that a regulated cannabis industry would make marijuana consumption safer and pointed to the profits the state stood to make.

“People drank before Prohibition, people drank during Prohibition, but the problem was profits went to organized crime rather than a regulated tax enterprise,” Mr. Looney said.

“Cannabis has been available for so long,” he added. “The reality is, it is already here.”