Criticized from the Start
From the beginning, the New York Cannabis Social Equity Investment Fund has been criticized for its handling of the state’s cannabis legalization program. The fund, established in June 2022, was intended to help 150 individuals victimized by the state’s old, racially biased drug laws enter the legal cannabis business. However, records obtained by THE CITY show that the fund has only assisted 21 stores in two and a half years and has been accused of predatory lending, secrecy, and mission failure.
A Tangle for Borrowers
For the fund’s social equity borrowers, the process has not been as seamless or secure. The stores took longer to open than expected, and licensees received conflicting information about what kind of deal the fund would offer. After the deal with Chicago Atlantic, the interest rate offered to prospective store operators jumped to 13%. The New York City recently launched its own public-private investment fund for cannabis entrepreneurs, which offers smaller loans with interest rates capped at 9.5%.
Keeping Secrets
As with much else about the fund, gleaning information about the payments to its managers was far more difficult than it would have been if the fund was a government agency open to public disclosure laws. Despite the state’s $50-million investment, Albany officials have repeatedly denied requests for documents or said they did not have information about the fund’s operations, citing its status as a private entity.
Conclusion
The New York Cannabis Social Equity Investment Fund’s performance has been marred by criticism, controversy, and secrecy. The fund, intended to help individuals enter the legal cannabis business, has only assisted a limited number of stores and has been accused of predatory lending, lacking transparency, and failing to meet its mission. As the state’s cannabis industry continues to grow, it is essential to re-examine the fund’s operations and ensure that it is serving the interests of social equity licensees.
Frequently Asked Questions
Q: What is the New York Cannabis Social Equity Investment Fund?
A: The New York Cannabis Social Equity Investment Fund is a public-private partnership established in June 2022 to help individuals victimized by the state’s old, racially biased drug laws enter the legal cannabis business.
Q: What is the goal of the fund?
A: The goal of the fund is to assist 150 individuals in entering the legal cannabis business.
Q: How many stores has the fund assisted?
A: The fund has assisted 21 stores in two and a half years.
Q: What are the criticisms of the fund?
A: The fund has been criticized for predatory lending, secrecy, and mission failure.
Q: How much money has the fund made?
A: The fund has earned $1.7 million in the most recently tallied 12-month period.
Q: What is the potential long-term earnings of the fund?
A: The fund stands to make millions more in the coming years, with a potential long-term earnings of $15 million over a decade.
Q: Why is the fund criticized for secrecy?
A: The fund has been criticized for its lack of transparency, with many questions remaining unanswered and important documents unavailable to the public.
