A first-of-its kind $200 million social equity fund in New York that’s been promised to qualified marijuana entrepreneurs is still awaiting its first investment that would help bankroll the effort, fund managers told MJBizDaily.
Under the state’s Marijuana Regulation and Taxation Act (MRTA), the first 150 adult-use cannabis retail licenses are reserved for nonprofits and “justice involved” social equity applicants.
In addition to “turnkey dispensaries” leased by the Dormitory Authority of New York, the law also set up a state-overseen investment fund that equity applicants can tap for startup capital.
The state pledged to contribute $50 million to the social equity fund, with the remaining $150 million to come from private-sector investors.
However, despite a Sept. 1, 2022, deadline to secure “capital commitments,” the state hasn’t yet secured funding, Reuben McDaniel III, DASNY’s president and CEO, told MJBizDaily.
“We have a great investor base, we’re negotiating our final terms,” he added. “We haven’t had our final close yet.”
To manage the fund, the state selected a management team including former NBA player Chris Webber, business partner Lavetta Willis, and investment firm Siebert Williams Shank.
Willis and Webber were selected despite their involvement in Michigan with major cannabis brand Cookies, which will sell their branded cannabis line in that state.
Asked by MJBizDaily about that situation, Webber brushed aside any notion that the arrangement posed any problems.
“If you had done your homework,” he said, “you wouldn’t have asked me that.”
Chris Roberts can be reached at email@example.com.