New York Recruiting Social Equity Fund Manager

New York is beginning its search for a fund manager for New York’s $200m social equity cannabis fund. In January of 2022, Governor Kathy Hochul announced that New York is proceeding with the $200m fund (as contemplated in the Marijuana Regulation and Taxation Act (MRTA)), with $50m of funds committed by the State and a plan to raise the additional $150m from outside investors.

DASNY has been integral in New York’s plans for an effective social equity fund, issuing the RFI that we write extensively about here and assuming responsibility for leasing the retail spaces that will constitute the backbone of the conditional retail dispensary licenses (see our post here).

As a brief refresher, the social equity fund will be used for “direct and indirect expenses associated with the sourcing, leasing, planning, design, construction and equipping of the RCD (retail cannabis dispensaries.” The funds issued to licensees will be in the form of a non-recourse, general unsecured debt obligations of the RCD operator (i.e. no personal guarantees required).

Based on the fund’s structure (both from the perspective of its predominantly private funding and deployment of capital as loans), finding the right manager to solicit investors and deploy capital will be crucial. Given that the RFI is pretty open about the risks associated with investing, finding the right person may be a tall order. From the RFI:

“As the Fund’s primary objective will be to advance the public purpose of providing social and economic applicants selected and licensed by CCB with a commercially viable RCD operation, the ultimate return provided to Fund investors may be limited and at risk.”

New York has decided to be on the forefront social equity, and the social equity fund is another step in the right direction. Stay tuned for further developments in New York’s cannabis market!

The post New York Recruiting Social Equity Fund Manager appeared first on Harris Bricken Sliwoski LLP.

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