(This story has been updated to correct an assertion that Verano Holdings owns a New York state license. The company does not hold a New York license.)
New York has finally secured an investor to help fully fund the $200 million in startup capital promised to social-equity marijuana entrepreneurs to open “turnkey” dispensaries, Gov. Kathy Hochul has announced.
Chicago Atlantic Admin, a publicly traded, Illinois-based investment firm that’s funded marijuana businesses across the country, has agreed to invest “up to $150 million” in the New York State Cannabis Social Equity Investment fund, Hochul said in a news release issued Friday.
The state itself has agreed to pony up $50 million to help bankroll the fund.
Chicago Atlantic’s commitment “reinforces New York’s commitment to building partnerships that benefit New Yorkers and setting right the wrongs of the past,” Hochul said in a news release issued Friday.
Past Chicago Atlantic investments include Verano Holdings, a multistate operator with licenses in 13 states including nearby New Jersey.
To date, New York has struggled to fulfill audacious promises to create a model for an equitable cannabis industry.
Under the state’s 2021 legalization law, up to $200 million was pledged to help social-equity cannabis businesses find real estate and open retail locations.
Of that total, $50 million would come from the state – funded by cannabis taxes – and $150 million from private investors.
But for more than two years, no private investors were found.
The lack of promised capital has been blamed in part for New York’s slow rollout of adult-use legalization.
Only 11 dispensaries across all of New York state are open for business, according to the Office of Cannabis Management, despite awarding hundreds of licenses.
Meanwhile, as many as 1,400 illegal cannabis sellers, ranging from bodegas and smoke-shops to weed trucks and audacious illegal dispensaries, operate in New York City alone.
In mid-June, Reuben McDaniel, the state official tasked with finding the money, resigned from the state Cannabis Control Board.
The state last month also launched a more aggressive crackdown campaign on illicit dispensaries.