On Wednesday January 5, 2022, throughout Governor Hochul’s first State of the State tackle, Hochul laid out her Administration’s plans for the approaching yr, together with a pledge to commit $200 million in private and non-private funds to assist social fairness candidates seeking to construct adult-use hashish companies.
Hochul’s State of the State Book states that “Whereas New York has dedicated to creating its hashish trade extra equitable, this motion will put that dedication into observe. New York will lead the place many different states have fallen brief.” This fund is predicted to offer direct capital and financing to social fairness candidates with the hopes to attain the present aim of awarding 50% of all licenses to fairness candidates, together with people from impacted communities, minority-and-women-owned companies (“MWBEs”), distressed farmers, justice-involved people and service-disabled veterans.
The Office of Cannabis Management (“OCM”), said that the fund will probably be administered in partnership with the Dormitory Authority of the State of New York (“DASNY”), which supplies financing and different providers to the general public and not-for-profits, in addition to different New York State establishments. OCM expects that round $50 million of the fund will probably be raised from charges and taxes collected from registered organizations (“ROs”) licensed to function in New York’s medical marijuana program, whereas $150 million will come from non-public traders seeking to put money into New York’s hashish trade.
In accordance with publication Law360, which spoke with trade stakeholders, there’s normal assist for Hochul’s aim, nevertheless, “they [are] not sure whether or not the funds can be prepared in time for the primary wave of entrepreneurs who need to bear the preliminary prices related to their functions.” These stakeholders additionally expressed considerations concerning what deal may need been struck in an effort to safe the non-public funding. This concern stems from ROs, which are sometimes multistate operators and are already licensed in New York’s medical marijuana program, shopping for into the adult-use market on the potential detriment of social fairness candidates and small companies.
Amber Littlejohn, Government Director of Minority Hashish Enterprise Affiliation, indicated to Law360 that Illinois additionally tried to institute a social fairness fund for its incoming adult-use market with charges from pre-existing medical marijuana companies, just for those self same companies to file litigation, which delayed the rollout of the social fairness program.
In New York, whereas the Marihuana Regulation and Taxation Act (“MRTA”) was signed into regulation final yr on March 31, 2021, no licenses have but to be authorized and it’s unclear what number of licenses the state will in the end award.
Following Governor Hochul’s tackle, the Hashish Management Board (“CCB”), the governing physique of OCM, met on January 25, 2022 to briefly talk about the social fairness program. Board Member Rubin McDaniel said that DASNY will help OCM “in overseeing the positioning location of potential websites, the design and build-out of these websites, and facilitate getting our fairness candidates into these websites so the capital and leasing is not going to be an obstacle to them being profitable.” McDaniel went on to state that “a problem the Governor, the Board Members and everybody who works for the Workplace of Hashish Administration acknowledges” is the significance of offering well timed and environment friendly capital to social fairness candidates, who’ve been disproportionately and negatively impacted by previous marijuana legal guidelines, so as to permit them to get into enterprise in a approach that different states haven’t been in a position to obtain.
