Crystal Peoples-Stokes is advocating to provide financial aid to struggling cannabis store operators in New York who were supported by a social equity fund but are now burdened with high-cost loans. The fund was meant to assist those affected by discriminatory drug laws. However, the fund has fallen short in opening stores and operators are facing difficulties in repaying debts. Peoples-Stokes suggested using fees paid by medical cannabis companies to help these operators. The New York Medical Cannabis Industry Association has filed a lawsuit claiming that the fees required for medical cannabis companies are unconstitutional as they have not been used for their intended purpose.
In a recent development, Crystal Peoples-Stokes, the majority leader of the state Assembly, has advocated for providing financial aid to struggling cannabis store operators who have been burdened with high-cost loans from a “social equity fund” that was established as a key component of New York’s marijuana legalization program. This initiative was discussed during the monthly Cannabis Control Board meeting in Albany. Peoples-Stokes highlighted the need to support applicants who were backed by the fund, intended to assist individuals impacted by past racially discriminatory drug laws but now facing challenges due to the high-interest loans they received.
The state began awarding cannabis operating licenses to qualified individuals in November 2022, particularly those with previous marijuana-related convictions or their family members. Governor Kathy Hochul proposed the creation of a $200 million social equity fund to help finance the opening of 150 dispensaries operated by the initial licensees. However, the fund has fallen short of its objectives, with only 21 stores opened out of the planned 150 after over two years. The construction costs for these stores exceeded initial estimates, leaving licensees burdened with significant debts and stringent repayment terms.
A recent article by THE CITY shed light on the financial struggles faced by operators like Roland Conner and Berkay Sabat, who have been unable to meet their financial obligations. Peoples-Stokes suggested utilizing a portion of the fees collected from medical cannabis companies entering the retail market to assist these struggling borrowers. These fees, amounting to $20 million per company, were implemented in September and require a $5 million initial payment. Peoples-Stokes expressed hope that these fees could be used to support Conditional Adult Use Retail Dispensary (CAURD) licensees who are grappling with high-interest loans for their properties.
Meanwhile, the New York Medical Cannabis Industry Association has filed a lawsuit challenging the constitutionality of the fees imposed on medical cannabis companies. The lawsuit argues that the current fee structure does not align with the state’s cannabis laws, as none of the funds collected have been allocated towards social and economic assistance programs, as originally intended.
In conclusion, the push to extend financial aid to struggling cannabis store operators in New York underscores the ongoing challenges faced by individuals seeking to participate in the legalized marijuana market. By addressing the financial burdens imposed on licensees through high-cost loans, there is a concerted effort to promote equity and support the growth of the cannabis industry in the state.
Source: TheCity.NYC
