New York’s $200MM Public-Private Fund for Equity Applicants

by Andrew Kingsdale

January 26, 2022

Inability to access adequate capital often plagues cannabis businesses. New York is taking a unique and helpful approach to this problem: a massive $200 million public-private fund designed to help New York’s social and economic equity cannabis applicants. 

At yesterday’s meeting of New York’s Cannabis Control Board, Board Member Reuben McDaniel, III elaborated on this program, which first was announced earlier this month in Governor Hochul’s State of the State address.  According to McDaniel, the funds will be directed toward applicants for retail licenses.  McDaniel, who also is President and CEO of the Dormitory Authority of the State of New York (“DASNY”), said that DASNY will oversee implementation of the program, which is aimed at helping underfunded equity applicants to locate, lease, and refurbish eligible retail locations.

In a press release today, the Cannabis Control Board further explained:

The Fund will provide support to certain licensed social and economic equity entrepreneurs for the costs of establishing and operating adult-use cannabis retail dispensaries. In addition, the Dormitory Authority of the State of New York (DASNY) will deliver a range of services directly to certain social equity cannabis retail operators, including but not limited to:

o Identifying and acquiring or leasing retail dispensary locations;

o Designing, constructing, and renovating the locations to operate as adult-use cannabis dispensaries; and

o Fitting out locations with furniture and other equipment as needed to operate the establishments, among other activities.

Yesterday, McDaniel also said that the Cannabis Control Board has created a “mechanism” so that at least some portion of the funds will be available to equity applicants when retail cannabis license applications are first released, thus allaying fears that this public-private program (or, at least the public part to be generated from license fees) would be “too little too late.”

As a reminder, New York’s Marijuana Regulation and Taxation Act (“MRTA”) sets out  six categories of social and equity applicants who may be eligible qualify for this $200MM fund:

(a) individuals from communities disproportionately impacted by the
enforcement of cannabis prohibition;

(b) minority-owned businesses;

(c) women-owned businesses;

(d) minority and women-owned businesses [];

(e) distressed farmers []; and

(f) service-disabled veterans.

(MRTA, Consolidated Laws of New York, Chapter 7-A, section 87. ¶2.)

We will elaborate further on these equity categories (and how to qualify for them) in future posts.

We will keep you updated about this exciting New York public-private fund as more information becomes available, along with other capital financing opportunities.