Allegations and Criticisms Mount against DASNY and Fund Manager in New York’s Cannabis Industry Rollout
The Dormitory Authority of the State of New York (DASNY) and the fund manager it selected, Social Equity Impact Ventures, are facing mounting criticisms and allegations in relation to the rollout of New York’s legal cannabis marketplace. DASNY was tasked with securing real estate for Conditional Adult-Use Retail Dispensary (CAURD) operators and finding a fund manager to raise $150 million from private investors, with an additional $50 million from the state, to support social equity entrepreneurs. However, nearly a year later, the fund manager has not raised any money for the fund, leading to industry stakeholders criticizing DASNY for the slow rollout of the cannabis marketplace.
Critics have raised concerns about DASNY’s lack of communication and transparency, opaque lease agreements, high build-out costs for CAURD locations without negotiation options for licensees, delayed site approvals, and more. Some CAURD licensees sent a letter expressing their concerns, which was later backed by New York’s largest cannabis industry group. The group also alleged a conflict of interest for DASNY’s president, who is also a Cannabis Control Board member. Additionally, more than 45 members of the New York State Society of Certified Public Accounts (NYSSCPA) sent a letter alleging that DASNY and Social Equity Impact Ventures were directing CAURD licensees to use a specific accounting firm exclusively, potentially creating a monopoly on accounting services. Another group, the NY CAURD Coalition, supported the criticisms and requested the remaining funds in the cannabis social equity fund be seized and accounted for.
DASNY denies allegations that licensees are required to use a specific accounting firm and states that Social Equity Impact Ventures only provides the option of using that firm’s services. The situation has caused confusion and frustration among CAURD licensees, who are already facing challenges in the rollout of the marketplace. The NY CAURD Coalition is seeking greater transparency, the approval of locations, fair contracting, and the release of the remaining funds to support licensees through grants or low-interest loans.