A cannabis-focused real estate investment trust will provide a $150 million investment to New York's social equity fund to finance the leasing and construction of the first licensed New York marijuana dispensaries, the governor announced Friday.
The investment by Chicago Atlantic Admin LLC will bring the fund — which aims to support business owners previously affected by cannabis prohibition in building their adult-use cannabis dispensaries — up to its goal of $200 million.
"New York has always strived to lead the nation in providing opportunities for those who have been unjustly denied privileges and opportunities," Gov. Kathy Hochul, a Democrat, said in her announcement. "I welcome Chicago Atlantic's participation in this program and applaud their recognition of the value that New York's cannabis program will provide to so many."
Hochul last year announced the formation of the $200 million fund, which draws on $50 million in public funds, and is jointly administered by the state's Office of Cannabis Management and Dormitory Authority of the State of New York, or DASNY, a public benefit corporation that helps build not-for-profit entities in the state.
The funds are intended to back businesses belonging to business owners provisionally licensed to set up New York's first licensed cannabis retailers under the conditional adult-use retail dispensary, or CAURD, program.
Regulators designed the CAURD program to give the state's first cannabis retail licenses to people who were directly impacted by the enforcement of cannabis prohibition. According to the governor's announcement, those licensees will be given "low interest loans to repay set-up costs associated with the fund program."
Reuben McDaniel, DASNY's president and CEO, who earlier this month stepped down from the Cannabis Control Board, called Chicago Atlantic's investment a "historic milestone in the history of justice and social equity in New York State."
"I am proud to partner with Chicago Atlantic, an experienced company that will help fulfill the governor's and Legislature's vision of providing opportunity and hope for individuals hurt by the draconian drug laws of the past," McDaniel said. "Chicago Atlantic's financial commitment and the partnership we have created, will help open doors for so many who have faced unsurmountable obstacles of accessing capital and economic security."
Some business owners licensed under the CAURD program told the Cannabis Control Board earlier this year that they were struggling to get their stores up and running according to the strictures put in place by DASNY, including requirements with respect to location siting and choosing contractors.
Based in Chicago and Miami, Chicago Atlantic provides business loans to the cannabis sector. The trust did not immediately respond to a request for comment Friday.