Assembly Majority Leader Advocates for Relief for Struggling Cannabis Store Operators
Cannabis Control Board Meeting
Assemblymember Crystal Peoples-Stokes, the majority leader of the state Assembly, called for financial aid to be extended to struggling cannabis store operators who have been burdened with high-cost loans from a "social equity fund" created as part of New York’s marijuana legalization program.
The Social Equity Fund
The social equity fund was designed to help individuals who were affected by abandoned racially discriminatory drug laws. The fund provided loans to applicants who qualified for cannabis operating licenses, with the goal of opening 150 dispensaries. However, the state-backed investment fund has missed its goals, with only 21 stores opened in over two years.
High-Interest Loans
The costs of building out the stores have far exceeded estimates, leaving licensees with huge debts and strict repayment terms. According to a recent report, some licensees, such as Roland Conner, who operates Smacked, have been unable to pay all of their bills. Another licensee, Berkay Sabat, turned to a Florida cannabis company for financing to stay open.
Peoples-Stokes’ Proposal
Peoples-Stokes proposed using a portion of the fees paid by medical cannabis companies to help fund borrowers. The fees, totaling $20 million per company, include a $5 million down payment and were enacted last September. She suggested that this money could be used to help CAURD applicants who are stuck with high-interest loans.
Lawsuit Filed
The New York Medical Cannabis Industry Association has filed a lawsuit alleging that the fees required for medical cannabis companies are unconstitutional. The suit argues that the current fee structure does not comply with the state cannabis law, as none of the money has been used to fund social and economic assistance.
Conclusion
Peoples-Stokes’ proposal to use a portion of the fees paid by medical cannabis companies to help fund borrowers is a step in the right direction. The social equity fund was designed to help individuals who were disproportionately affected by discriminatory drug laws, and it is essential that the state takes steps to ensure that these individuals are not left with unsustainable debt.
FAQs
Q: What is the social equity fund?
A: The social equity fund is a program designed to help individuals who were affected by abandoned racially discriminatory drug laws.
Q: What is the purpose of the fund?
A: The purpose of the fund is to provide loans to applicants who qualify for cannabis operating licenses, with the goal of opening 150 dispensaries.
Q: Why are some licensees struggling?
A: The costs of building out the stores have far exceeded estimates, leaving licensees with huge debts and strict repayment terms.
Q: What is the proposed solution?
A: Assemblymember Crystal Peoples-Stokes has proposed using a portion of the fees paid by medical cannabis companies to help fund borrowers.
