Political Leaders Remain Silent as Fundraising Efforts Stall
New York’s leaders were vocal about creating a socially just cannabis industry. However, the state has failed to raise $150 million from private investors, causing concern and questions about the future of its equity-focused portion of the legal marijuana market rollout. Despite calls for transparency and accountability, Gov. Kathy Hochul and other leaders have remained silent on the matter.
DASNY Struggles to Raise Funds for Social Equity Cannabis Investment Fund
DASNY, the agency charged with finding a fund manager to raise $150 million, has been unable to secure any private investment. Despite eight months of effort, the agency has failed to reach its “final close.” The lack of funds puts the $200 million initiative in jeopardy, which includes $50 million pledged by the state and $150 million from private investors. The goal of the funds is to provide loans and support to roughly 150 Conditional Adult-Use Retail Dispensary (CAURD) licensees, all of whom are “justice-involved individuals.”
Implications for the Cannabis Industry and Justice-Involved Individuals
The failure to raise funds for the Social Equity Cannabis Investment Fund has implications for the cannabis industry and justice-involved individuals. The build-outs and loans to roughly 150 CAURD licensees, all of whom are “justice-involved individuals,” are now in jeopardy. The lack of funds also affects CAURD applicants who have invested time and money in the program. The injunction on some regions has added to the uncertainty, as the state struggles to find a “Plan B” to address the lack of funds.
The Murky Selection Process of Social Equity Impact Ventures
The controversy surrounding the Social Equity Impact Ventures, the headliners chosen by DASNY to manage the social equity fund, has added to the controversy. The team comprises former NBA player Chris Webber, entrepreneur Lavetta Willis, and a team from investment firm Siebert Williams Shank. The investigation by NY Cannabis Insider found that Webber and Willis had a history of making misleading or false claims about their accomplishments. The team’s ability to raise funds was also questioned, causing concern among industry players.
Lack of Transparency and Accountability
The lack of transparency and accountability by DASNY has raised questions about the selection process of Social Equity Impact Ventures. The agency delayed providing documents that would show how the team was chosen to raise and manage money. After weeks of non-responsiveness, the documents were provided only after enlisting the Committee on Open Government to intervene. The documents confirmed that Impact Ventures did submit information to the state that was not true or was a stretch.
The Future of the Social Equity Cannabis Investment Fund
The future of the Social Equity Cannabis Investment Fund is uncertain, as fundraising efforts have stalled. DASNY remains optimistic that the fund will be successful, but industry players are doubtful. The lack of funds puts the equity-focused portion of the legal marijuana market rollout in jeopardy, affecting justice-involved individuals and the cannabis industry. The controversy surrounding the selection process of Social Equity Impact Ventures has added to the concerns.