New York Governor Kathy Hochul announced last week that the state’s Cannabis Social Equity Fund has secured a $150 million investment to support entrepreneurs licensed to open recreational cannabis retail stores. bottom. Under the terms of the agreement, Chicago Atlantic Admin LLC will invest up to $150 million in collateral capital to provide loans to business owners adversely affected by years of cannabis prohibition.
“New York City has always strived to lead the nation in providing opportunities to those who have been unfairly denied privileges and opportunities.” Hochul said. said in a statement from the governor’s office. “Today’s announcement reinforces New York City’s commitment to building partnerships that benefit New Yorkers and to righting the wrongs of the past. We commend them for recognizing the value that cannabis programs provide to so many.”
Fund created last year
Last year, Ho-Chol included the creation of the New York State Cannabis Social Equity Investment Fund in the Fiscal Year 2023 state budget. The public-private partnership provision sets a goal of $200 million, which includes $50 million from state cannabis taxes and $150 million in outside investment. The investment is intended to fill the shortfall in investment capital available to cannabis businesses facing difficulties in securing capital due to ongoing cannabis illegality at the federal level.
This fund will be used to help individuals affected by unfair enforcement of cannabis laws who have a conditional adult-use cannabis dispensary (CAURD) license from the New York State Cannabis Control (OCM) and Cannabis Control Board. be done. Under the state’s cannabis regulations, at least 300 of the state’s original CAURD licenses are reserved for legal entrepreneurs.
Chicago Atlantic manages a diversified portfolio of credit investments in the cannabis industry, with over $1.8 billion in over 50 investments. The Company’s flagship investment vehicle, Chicago Atlantic Real Estate Finance, is a mortgage real estate investment trust that provides secured loans to state-licensed cannabis businesses.
“We thank Chicago Atlantic for investing in New York’s first adult retail licensee,” said Chris Alexander, executive director of the New York State Cannabis Authority. “This infusion of funds will provide much-needed support to licensees and further New York State’s efforts to establish a comprehensive cannabis market that creates opportunities for entrepreneurs harmed by prohibition and barred from markets in other states. It will help us move forward.”
Financing a new hot pot shop
The Cannabis Social Equity Foundation of New York is helping people with CAURD licenses cover the costs of establishing a recreational cannabis retail dispensary, including identifying and leasing suitable retail locations, space design, construction and equipment. Assist. Social Equity Servicing Corporation (SESC), a subsidiary of the New York State Board of Dormitory Administration (DASNY), performs pharmacy development operations as an agent for the Cannabis Social Equity Investment Fund.
Last year, DASNY launched a call for proposals for a team to manage a cannabis social equity fund and raise an additional $150 million through private investment. In June 2022, Social Equity, a joint partnership between Weber Willis Ventures LLC, a company led by NBA Hall of Famer Chris Weber and his business partner Labetta Willis, and affiliates of Siebert, will be launched. The agency announced that it has signed a contract with Impact Ventures. Williams Shank.
“We are honored that Chicago Atlantic recognized the Foundation’s role in promoting social equity in New York State’s cannabis industry. We are committed to creating ,” Webber said. “This transformative collaboration marks an important milestone in our collective journey towards a future where all individuals have equal access to opportunity and funding, thereby empowering communities and creating positive change. promote.”
New York state’s cannabis social equity program’s goals have been hailed as a way to ensure access to the legal recreational market for those who have borne the brunt of decades of prohibition and disproportionate enforcement. But critics mock the slow pace of pharmacy openings. The first adult cannabis retail store will open in late 2022. Since then, fewer than a dozen stores have opened statewide. Information from OCM.