It was a promise made just months ago by New York Governor Kathy Hochul at the time she replaced scandal-ridden Andrew Cuomo — that she would get New York State’s stalled legalized cannabis program up and running with a special focus on social equity applicants. And in her first State of the State address last month, she did just that.
New York’s new adult-use program has a stated goal of awarding 50 percent of initial licenses to social equity applicants — giving priority to individuals from impacted communities, minority-and women-owned businesses (MWBEs), distressed farmers, justice-involved individuals, and service-disabled veterans. (New York State Senator Jeremy Cooney has introduced legislation that would expand the list to include the LGBT community.) To give these licensees the resources they need to succeed, a $200 million fund, along with a State-run business incubator, are being created.
As a public-private fund, the initial seeding will come from licensing fees, tax revenues, and private investment. Administration of the financial assistance will be handled by the Office of Cannabis Management (OCM), the new agency tasked with creating the regulatory framework for the state cannabis industry including product production, packaging, marketing and sales.
Social equity applicants are also eligible to have their application fees reduced or waived; this represents significant savings when the application fees in neighboring states are considered. For example, the license application fee can be as high as $1600 in New Jersey and Connecticut. A cultivation license costs $75,000 in Connecticut, and a manufacturing license up to $50,000 in New Jersey. Although New York’s fees are yet to be set, they will certainly be in par with these neighbors.
Another benefit for social equity applicants is the business incubator which is being set up to provide initial aid in applying for licensing. Once a license is issued, direct support will be provided in the form of counseling services, education, small business coaching, financial planning, and compliance assistance.
So it’s very clear that New York State wants its social equity applicants to be successful, and is ready to go far beyond the basic training some other states provide to include direct capital and startup financing plus comprehensive support programs. All to ensure that New York’s cannabis industry will be, as Governor Hochul’s administration states it, “the most diverse and inclusive in the nation.”