In one recent policy document, the Democratic governor\u2019s administration vowed to create \u201cthe most diverse and inclusive\u201d marijuana industry in the nation.<\/p>\n
\u201cNew York will lead where many other states have fallen short,\u201d it said.<\/p>\n
Would-be equity applicants hope so. But they\u2019re anxious for answers about who would provide private dollars and whether the money would help cover the costs of seeking a license, not just start-up expenses for people who can afford to secure one.<\/p>\n
\u201cTwo hundred million dollars sounds great,\u201d says Amber Littlejohn, the executive director of the Minority Cannabis Business Association, but \u201cit\u2019s really not so much the amount as it is the timing of the funding and services. And if that comes after the point of application, its ability to be impactful is really limited.\u201d<\/p>\n
Licensed sales are expected to launch sometime next year in New York, where adult recreational use of the drug was legalized <\/a> last March.<\/p>\n New York\u2019s equity program could give both grants and loans to eligible businesses, which would include those owned by women or minorities, struggling farmers, disabled veterans and people from communities that endured heavy pot policing.<\/p>\n Lawmakers and the governor\u2019s office are negotiating about the proposed fund. Specifics are still in the works, said Chris Alexander, the executive director of the state Office of Cannabis Management.<\/p>\n \u201cWe want to make sure that these equity businesses have a chance to start the industry here, and and we\u2019re very cognizant of the fact that they need these resources as early as possible,\u201d he said.<\/p>\n He said the agency aims to limit application costs and documentation requirements as a way to make licensure accessible.<\/p>\n Charlotte Hanna remembers what it took to open her company\u2019s Massachusetts dispensary, called Rebelle \u2014 consultants, lawyers, engineers, and tens of thousands of dollars in a down payment on a building. She covered the costs with money she\u2019d made flipping houses, but she applauds New York\u2019s fund as an \u201cincredible\u201d resource.<\/p>\n \u201cIt\u2019s just a creative way that the state is looking at to help finance people that have had a hard time getting into the market,\u201d says Hanna, CEO of Rebelle\u2019s woman-and-minority-owned parent company, Community Growth Partners. It\u2019s aiming to expand to Illinois, New Jersey and her home state of New York.<\/p>\n Recreational use of marijuana is now legal in a third of U.S. states and medical marijuana in nearly three-quarters.<\/p>\n Diversifying the marijuana business and improving opportunities for people who bore the brunt of the decades-long U.S. war on drugs <\/a> has become a priority in some states as pot legalization created a new multibillion-dollar industry of predominantly white proprietors, executives and investors.<\/p>\n Social equity efforts range from licensing priorities to training to loans, but progress has been slow <\/a> in many states.<\/p>\n \u201cAccess to capital is absolutely one of the biggest barriers to entry and barriers to success for minorities and women in the cannabis business,\u201d says Tahir Johnson, the social equity and inclusion director at the Marijuana Policy Project, a pro-legalization group.<\/p>\n Opening a marijuana business can cost hundreds of thousands of dollars or more. As pot is federally illegal, many banks are unwilling to lend <\/a> to sellers, growers and processors, and they\u2019re ineligible for federal Small Business Administration-backed loans.<\/p>\n Many entrepreneurs begin by tapping personal funds, relatives, or friends \u2014 resources that aren\u2019t equally available to all in a country with wealth gaps between women and men<\/a> and between whites and people of color. <\/a><\/p>\n Social equity applicants qualify for license fees discounts in some states. Several offer grants or loans.<\/p>\n Washington state provides $1.7 million a year for grants. Connecticut has authorized borrowing up to $50 million for assistance including low-interest loans and capital. Some cities and counties, particularly in California, have their own initiatives; Los Angeles has given out $6 million in a year.<\/p>\n New York\u2019s plan takes a page from Illinois, which is working with private lenders to make up to $34 million in loans.<\/p>\n The Empire State\u2019s proposal so far envisions allocating $50 million \u2014 money the state would advance before collecting it from license fees and taxes \u2014 and looking to private investors for the rest, with a private partner helping to manage the effort, said Alexander, the cannabis agency director.<\/p>\n The state Dormitory Authority, a construction agency, could help social equity businesses line up and build out locations.<\/p>\n \u201cWe\u2019re trying to identify all the things that people needed and they didn\u2019t have in other states,\u201d Alexander said.<\/p>\n Comments are not available on this story.<\/p>\n
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