Citing an investigation by THE CITY, two state senators have called for New York’s social equity cannabis fund to cease issuing loans to dispensary operators and for any “trapped in these predatory deals to be made whole.”
“What this story describes is not a social equity fund. We must get to the bottom of this,” State Sens. Liz Krueger (D-Manhattan) and Gustavo Rivera (D-The Bronx) asserted in a joint statement that pointed to the high interest rates and start-up costs highlighted in the article.
They called for an investigation by the state’s inspector general of the public–private fund, which was designed to finance a form of reparation for people whose lives had been disrupted by decades of racially discriminatory drug laws.
The governor’s office did not immediately respond to a request for comment. The office has repeatedly refused to answer detailed questions from THE CITY seeking greater clarity about the fund’s operations.
THE CITY’s investigation found that officials of the state’s Office of Cannabis Management, or OCM, had repeatedly warned the governor’s office for months about how the cannabis investment fund was being managed. They raised red flags about how dispensary operators were being loaded with steep costs and trapped in loans with strict terms that they believed were likely to lead to defaults. And OCM’s own counsel warned in an email that the licensees would likely default on their loans under the proposed terms.
The story was based on more than 500 internal agency emails, memos and presentations from July 2022 to July 2023 when the state was having trouble opening more than just a handful of dispensaries.
Calling the fund’s practices “unscrupulous,” the legislators said, “We must take action to redress these loan agreements.”
Hellbound and Down 