NEW YORK — A long-planned fund to help disadvantaged people start legal cannabis businesses in New York is finally nearing its ambitious money-raising goal after a private company agreed to invest $150 million, Gov. Kathy Hochul's office announced Friday.
The investment is coming from Chicago Atlantic, an asset management firm with extensive experience in the cannabis industry. The state put up $50 million and always anticipated the rest would come from private sources.
The $200 million fund is among the largest sum any state has contributed to — to try to ensure diversity and equity in the rapidly growing legal marijuana business. The fund was envisioned as a way to help what it calls “social equity" entrepreneurs", whom the state has defined as including women, people of color, struggling farmers, disabled veterans and people from communities that endured overpolicing.
New York has reserved its first dispensary licenses mainly for people with prior marijuana-related convictions or their relatives; some early licenses also are going to nonprofit groups, such as Housing Works. The fund is meant to help those applicants find, lease, renovate and furnish storefronts. The money is contributed as low-interest loans, which the licensees will be required to pay back.
“New York has always strived to lead the nation in providing opportunities for those who have been unjustly denied privileges and opportunities,” Hochul said.
With the funding, New York could see a quicker rollout of legal recreational dispensaries as the state cracks down on its illegal market.
The Democratic gov. and her administration announced the social equity fund in early 2022, but word on private funding stalled for months.
“Social equity is the cornerstone of New York’s cannabis industry," said John Mazarakis, a founding partner of Chicago Atlantic Admin LLC, in a statement. "We aim to pair progressive licensing with progressive and innovative capital solutions."
