New York City is investing in an equitable cannabis industry that "creates jobs, grows businesses, and creates greater prosperity in the process,” said Maria Torres-Springer, Deputy Mayor for Housing, Economic Development and Workforce.
In an effort to promote participation in the marijuana industry by individuals disproportionately impacted by marijuana criminalization, city officials announced the launch of the Cannabis NYC Loan Fund, reported Marijuana Moment.
The New York City Economic Development Corporation (NYCEDC) posted a request for proposal (RFP) seeking lenders and an administrator for the fund, which aims to provide low-cost financing to social equity applicants entering the cannabis market.
The city intends to raise $20 to $30 million for the fund, with an initial infusion of $8 million from the city itself. The ultimate amount will depend on the response of private lenders. The fund will offer below-market capital to prospective cannabis equity business owners, enabling them to establish operational facilities within the city.
"To access subsequent, larger loans, businesses need to meet certain operation milestones and entrepreneurs have to complete related technical assistance requirements," noted the RFP. This approach aims to protect against losses and allocate more funds to businesses with a higher likelihood of success. Additionally, loans from the fund will be coupled with technical assistance to increase the chances of borrower success and mitigate the risk of default.
See Also: New York Crackdown On Illicit Cannabis Continues, Enforcement Hearing And Message From Gov. Hochul
Supporting Social Equity Applicants
While New York City is taking steps to support social equity applicants in the cannabis industry, there are concerns from industry associations like the Cannabis Association of New York (CANY) that decisions by the state are hindering progress. Brittany Carbone, a cannabis farmer and CANY board member highlights the challenges faced by growers and retailers, which have been further exacerbated by slow retail openings.
“At first, the Dormitory Authority (DASNY) was the big problem with the CAURD thing, but then the blame really has to be put on the Office of Cannabis Management (OCM) because it was obvious that they weren’t going to meet the timeline goals,” Carbone said per Spectrum Local News. She also criticized the lack of transparency and unrealistic timelines set by the OCM. The delays have resulted in a limited number of retail spaces opening across the state, leaving farmers like Carbone with an excess stock of cannabis, which has a limited shelf life,
See Also: New York Introduces Cannabis Farmers' Markets To Address Supply Chain Glut And Lack Of Retail Shops
Carbone expressed frustration over what she perceives as more favorable regulations toward medical marijuana companies seeking to enter the recreational market.
Conditional cultivators, including Carbone, are subject to limitations on the amount of space they can utilize, whereas medical marijuana companies are authorized to operate up to 100,000 square feet of canopy space without a limit on the number of lights they can use.
What’s Next?
The Cannabis Control Board's upcoming meeting in NYC will include the approval of "growers' showcases," a development supported by Carbone.
“There’s definitely a need for some additional outlets to sell cannabis products, and at the same time, there’s also an investment that comes from those registered organizations’ participation in the adult-use market – an investment that will be significant in helping to fund our equity programs,” said OCM’s executive director Christopher Alexander. “It is a bit of a give and take.”
Interested in delving deeper into the complex challenges confronting not just the New York cannabis industry but also other states? Consider joining us at the Benzinga Cannabis Capital Conference in Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment, branding, culture, and where deals get done.
Read Next: Unlicensed Manhattan Weed Chain Raided By Police, Owners Argue They Were Doing Nothing Wrong
Photo: Courtesy Of Jermaine Ee On Unsplash
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