John SchroyerNew York Gov. Kathy Hochul wants to “claw back” funding for a one-time $50 million loan that was intended to kickstart the acquisition and build-out of up to 150 social equity recreational dispensaries, The New York Times reported Tuesday.
The problem is that the fact that the funds were a loan in the first place was lost in the shuffle of the past few years as the market rolled out, amid various lawsuits and other issues, which now means that stakeholders who were counting on cannabis tax money to fund community investment programs are left without any such capital, The Times reported.
“It’s not the fault of these communities or applicants that this fund failed and now has to get paid back,” Joseph Belluck, an attorney on the state Cannabis Advisory Board, told The Times. “To ask them to bear the burden of the repayment is just completely unjust and not in the spirit of the law.”
Belluck noted that the board will only be getting $5 million this year under Hochul’s budget, as opposed to a larger slice of the $161.8 million in cannabis-related taxes the state has collected during the current 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 strategy for repayment may face challenges, however, depending on some key legislators who may take action to keep those programs paid for. State Sen. Liz Krueger, one of the primary authors of the 2021 law that legalized recreational marijuana, said last week that she doesn’t support the governor’s plan to get the $50 million back, and said it should still be put towards community reinvestment plans.
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 said she was absolutely against the fund managers being given a second shot at administering more loans for social equity retailers.
