{"id":3911,"date":"2022-01-27T15:19:27","date_gmt":"2022-01-27T15:19:27","guid":{"rendered":"http:\/\/CBMiTmh0dHBzOi8vd3d3Lmpkc3VwcmEuY29tL2xlZ2FsbmV3cy9lbXBpcmUtc3RhdGUtY2FubmFiaXMtdXBkYXRlLXNvY2lhbC00MDc4NjI1L9IBAA"},"modified":"2022-01-27T15:19:27","modified_gmt":"2022-01-27T15:19:27","slug":"empire-state-cannabis-update-social-economic-equity-what-is-it-who-qualifies-and-the-path-to-licensure-jd-supra","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=3911","title":{"rendered":"Empire State Cannabis Update: Social & Economic Equity \u2013 What is it, Who Qualifies, and the Path to Licensure – JD Supra"},"content":{"rendered":"

When New York State legislators passed the Marijuana Regulation and Taxation Act (MRTA) in March of 2021, the legislative intent of the bill was clear\u2014\u201cgenerate significant new [tax] revenue\u201d and \u201cmake substantial investments in communities and people most impacted by cannabis criminalization to address the consequences of such criminalization.\u201d  While the tax revenue plan was cut and dry\u2014a 13 percent gross tax on cannabis products (9 percent state and 4 percent municipal)\u2014how the Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) would accomplish its Social and Economic Equity Plan has been much less clear. <\/p>\n

At the beginning of January 2022, however, New Yorkers received their first glimpse of the benefits social equity applicants will receive under the MRTA.  As part of her State of the State address, Governor Kathy Hochul\u2019s accompanying State of the State Book<\/a> made a major commitment\u2014a \u201c$200 million public-private fund. . . . [to] provide direct capital and startup financing to social equity applicants as the state takes meaningful steps to ensuring that New York\u2019s cannabis industry is the most diverse and inclusive in the nation.\u201d <\/div>\n

In direct response to Hochul\u2019s announcement, in its first meeting of 2022, the Cannabis Control Board addressed the adult-use program for the first time, focusing on the social and economic equity fund announced by the governor.  As demonstrated by the CCB\u2019s slide below, the fund\u2019s initial purpose will be to \u201cprovide support to certain licensed social and economic equity entrepreneurs for the costs of establishing and operating adult-use cannabis retail dispensaries.\u201d  <\/p>\n

 
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This is just the beginning. <\/em><\/p>\n<\/div>\n

In the coming months, the CCB will build out the essential elements of the social and economic equity program and how it will affect licensing in order to accomplish the goals of the MRTA.  Still, the full spectrum of benefits this program will offer remain largely undefined.  On the eve of adult-use regulations, it is important to underscore what we do know about the MRTA and social equity so prospective applicants can assemble the necessary materials to qualify for such treatment and reap the benefits of the program and the fund once applications go live.  Below are the main facets of the MRTA\u2019s social and economic equity program. <\/p>\n

What are the MRTA\u2019s goals for social and economic equity in New York\u2019s adult-use marketplace?<\/strong> <\/p>\n

MRTA \u00a7 87(1) requires the CCB to create and implement a social and economic equity plan that \u201cpromote[s] racial, ethnic, and gender diversity when issuing licenses for adult-use cannabis related activities,\u201d through mentoring and prioritizing those who qualify as social equity applicants.  \u201cThe [CCB\u2019s] social and economic equity plan shall also promote diversity in commerce, ownership and employment, and opportunities for social and economic equity in the adult-use cannabis industry.\u201d  MRTA \u00a7 87(2). 
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Who\/what will qualify as a social and economic equity applicant? <\/strong><\/p>\n

Pursuant to MRTA \u00a7 87(2), the following categories of businesses qualify as social and economic equity applicants:  <\/p>\n