New York Gov. The New York Times reports that Kathy Hochul is looking to claw back funding from a $50 million one-time loan, which was meant to jumpstart the construction and acquisition of 150 recreational cannabis dispensaries for social equity.
The Times reported that as the cannabis tax was used to fund the community investment program, it became lost among the various lawsuits that were filed and the other problems that were raised. Now, stakeholders that were relying on the money from the tax for funding their programs have no such funds.
The Times reported that Joseph Belluck is an attorney who serves on the Cannabis Advisory Board of the state. To ask that they bear the cost of repayment is unjust. It’s not the spirit of law.
Belluck pointed out that under Hochul’s budget the board would only receive $5 million, compared to the larger share of $161.8 in cannabis taxes collected by the state during this fiscal year.
Belluck said that means community investment programs – including grants to nonprofit organizations working in areas that were hit hard by cannabis prohibition and enforcement – will go largely unfunded this year, so that the state can get its $50 million back.
Hochul’s repayment strategy may be challenged by key legislators, who could take actions to ensure that these programs are funded. Liz Krueger of state senators, who was one of the main authors of 2021’s recreational marijuana law, stated last week she does not support Hochul’s strategy to recover the $50 million. She said that the money should be used for community reinvestment programs.
Krueger said the fund that managed the $50 million – which partnered with Chicago Atlantic to reach $200 million in funding – was irresponsibly run and noted that it only paid for 22 social equity dispensaries, far short of the intended 150. Krueger was against the managers of fund being allowed to take another shot at managing more social equity retailer loans.