State commits half of its investment in marijuana retailers

By Published On: July 25th, 2023Categories: Capitol Notes

About half of the $50 million the state put aside to build up New York’s marijuana retail industry has been committed to ongoing and completed projects, according to a spokesman with the Dormitory Authority of the State of New York.

The state investment is part of the Social Equity Cannabis Fund, created last year at the urging of Gov. Kathy Hochul and designed to provide capital to New Yorkers establishing marijuana dispensaries, but aren’t unable to finance the initial operations on their own. This summer the fund secured a long-promised commitment of $150 million in private investment.

While none of the private money had gone out the door by the start of the summer, about $6.6 million of state funds has been spent on “design and construction” work by contractors, according to DASNY. The state has committed approximately $25 million for ongoing work, but payment will be made in the form of reimbursements and aren’t distributed until work is done and validated.

As of July 19, DASNY reported four fund-supported dispensaries in operations, with 10 building permits in hand and 19 signed leases. They anticipated finalizing two additional building permits this week and noted that “more” leases are in the final stages of being completed.

“With all the leases, work orders and active construction invoices, the actual dollars and financial commitments changes constantly, but we are pleased with the current pace of financial deployment on the project,” said DASNY spokesman Jeffrey Gordon.

The rollout of New York’s marijuana retail dispensaries has been slow going since state lawmakers and then-Gov. Andrew Cuomo legalized marijuana and paved the way for adult-use, recreational sales in 2021. Legal sales began in late 2022, but new dispensaries have yet to open at the pace forecasted last year by Gov. Kathy Hochul.

While the Social Equity Cannabis Fund was designed to help overcome some of the obstacles to opening dispensaries, some licensees have chosen to forego the state’s help in launching their businesses, finding the attached conditions to be too burdensome.