New York will set up a $ 200 million fund to support social justice applicants seeking an adult cannabis business license, Governor Kathy Hochul announced during her speech on the state in Albany on Wednesday.
The fund is welcome news to those who have wondered how one of the most progressive cannabis legalization laws in the country would support those hardest hit by the war on drugs. But the funding mechanism – a “public / private” model based on royalties and taxes, according to the governor’s office – has worried some industry insiders.
Amber Littlejohn, executive director of the Minority Cannabis Business Association, said she supported the idea but wondered what she would do with the schedule for social justice applicants entering the newly formed market.
If the seed funding comes from royalties and taxes, it likely means money won’t be available to those applicants until the adult market is up and running, Littlejohn said.
“I love the spirit; $ 200 million sounds good, but if the market is already open it’s too late, ”said Littlejohn.
She also asked where the private funding will come from and whether these money-pouring companies could have a head start in the emerging market.
The New York Marijuana Regulation and Taxation Act was enacted in March by former Governor Andrew Cuomo. The act establishes the State Office of Cannabis Management and Cannabis Control Board, which serve as the primary regulators of New York’s cannabis industry for adult use.
The MRTA also has a goal of giving 50% of its licenses to social justice applicants. Groups eligible for social justice status include those disproportionately harmed by cannabis enforcement, minority or female-owned businesses, farmers in distress, and veterans with disabilities.
So far, authorities have not released details on how they would achieve the goal of giving half of the state’s cannabis business licenses to these groups.
Denise Lyons and Cindy Gillespie, who are seeking an adult cultivation license for their Liverpool-based company LG Growers, said in an email that they were grateful to Hochul for proposing the fund.
“This type of funding is groundbreaking and demonstrates the governor’s commitment to providing social justice applicants with an equal opportunity to participate in this innovative new industry,” said Lyons and Gillespie. “This type of innovation is essential for New York State to meet its equity target of fifty percent (50%) of the licensed licenses.”
James Jordan, CEO of Cultavision, a vertically integrated cannabis supplier based in Syracuse, said he believes the $ 200 million fund seems to demonstrate the sincerity of the Hochul government in helping cannabis entrepreneurs with social justice.
The fund “gives us the chance to have an open playing field and be part of the industry that is opening up and beginning to develop,” said Jordan, who intends to apply for Cultavision admission as a social justice applicant.
Jordan said he was a little concerned about the possibility of funds not becoming available until after the state’s market opens to adults. However, with Hochul just making the announcement, Jordan believes it is time for social justice seekers to press for access to the money before legal sales begin in New York.
“I’ve seen a lot of other states’ social equity plans, and I think this one here in New York is the best I’ve seen,” said Jordan.