New York Gov. Kathy Hochul's budget proposes clawing back $50 million the legislature approved in 2022 to help small business owners with marijuana convictions open New York’s first licensed cannabis dispensaries, the New York Times reports. Just 22 of the planned 150 planned stores have opened. Some owners now say the state lured them into a debt trap with a provision in the Cannabis Social Equity Investment Fund that largely went unnoticed until now. When the dispensary fund was created, the governor said the state’s contribution would come from cannabis business licensing fees and tax revenues. But that was impossible since no sellers had been licensed yet. Instead, the state paid its portion from its main coffers. Now, Hochul is seeking repayment as the state’s turbulent rollout has stabilized, but programs required to deliver on the law’s justice goals remain undeveloped.
Lawmakers and activists who pushed for legalization say the plan goes against the state’s intention to uplift low-income Black and Latino neighborhoods where the vast majority of marijuana arrests have occurred. Joseph W. Belluck, a lawyer who leads the state panel steering some of the cannabis revenue to affected communities in the form of reinvestment grants, said the timing couldn’t be worse as Republicans led by President Trump move to slash federal aid and destroy equity programs. The state should figure out another way to repay itself, he argued. “It’s not the fault of these communities or applicants that this fund failed and now has to get paid back,” Belluck said. “To ask them to bear the burden of the repayment is just completely unjust and not in the spirit of the law.” Kassandra White, a spokeswoman for Hochul, confirmed the purpose of the payment in an email on Monday. She suggested that under the law, the governor’s hands were tied. “Legislation was passed in 2022 to require repayment of this investment,” she said. “The state is now following that law.” The Office of Cannabis Management, which creates and enforces the policies governing the legal market in New York, has a backlog of more than 5,000 applications for business licenses. Most of them are from people who qualify for financial assistance and mentorship that the agency is not equipped to provide, even though it is legally required to.
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