Drug Policy Alliance Urges New York Legislature To Fully Fund Cannabis Justice Reforms At Economic Development

The Drug Policy Alliance (DPA), joined by advocacy organizations, provided testimony today to the New York State Joint Legislative Budget Hearing on Economic Development, calling on lawmakers to fulfill the promises of the Marijuana Regulation and Taxation Act (MRTA). Despite progress in establishing one of the nation’s most equitable cannabis markets, the organizations warned that the Hochul administration’s failures threaten the program’s ultimate success.

“Despite early successes, the goals of the MRTA remain deferred,” according to the testimony. “While we’ve experienced the makings of a historic paradigm shift in launching the blueprint for one of the country’s most equitable cannabis markets, we’ve also observed significant backsliding on basic, foundational commitments, promises, and protections that stand to jeopardize the opportunity for sustained success.”

DPA’s testimony highlights the administration’s failure to deliver on a $200 million public-private Social Equity Cannabis Investment Fund promised in 2022 to help justice-impacted entrepreneurs. The fund fell drastically short, leaving many licensees without financial support. Instead, the state secured a deal with Chicago Atlantic that guaranteed the private financier a 15% return – creating a risk-free investment for Wall Street while saddling small businesses with predatory loan terms.

“The State guaranteed Chicago Atlantic, the ultimate financier of the fund, a 15% return on its investment even if dispensary owners failed—a nearly risk-free proposition charging above-market interest rates and padded by inflated construction costs. Despite several warnings by former OCM leadership and staff to reject the deal, this administration chose to hinder the very licensees that the MRTA was intended to prioritize,” they added. 

In today’s testimony, DPA urged the legislature to:

• Convert Conditional Adult-Use Retail Dispensary License (CAURD) loans into forgivable loans or grants.
• Fund CAURD licensees’ buildout and rental costs.
• Codify the CAURD program to ensure its longevity.

The organizations today also raised concerns over the dwindling number of cannabis licenses awarded to communities disproportionately impacted by the War on Drugs. As of December 2024, only 2% of retail dispensaries and 3% of cultivators are located in these communities.

DPA’s testimony highlights the Hochul administration’s interference in the  licensing process, which deprioritized Social and Economic Equity (SEE) applicants. OCM also deferred fee payments for large Registered Organizations (ROs), reducing funding for the SEE program and favoring large corporate operators over small businesses.

Many key positions in OCM remain vacant and it’s unclear if those with the specialized expertise of cannabis legalization, economic development, and the MRTA are making the most consequential decisions while large corporate interests continue to exert undue influence through lawsuits and their endless lobbying tactics to dominate the market at the expense of everyday New Yorkers.

The Chief Equity Officer position has remained vacant for nearly a year, further undermining oversight of law’s equity provisions. Since last year, the share of SEE licensees in the market has plummeted, and key OCM staff departures raise further concerns about the administration’s commitment to social equity and following the state’s historic cannabis law.

In response, DPA also called on the legislature to:

• Fully fund the SEE program to support CDI entrepreneurs.
• Increase transparency and oversight of OCM’s decisions.
• Ensure the Chief Equity Officer role is both filled and empowered.

“The Bronx Cannabis Hub was created to ensure that the communities most harmed by marijuana criminalization—particularly in the Bronx—have a real shot at success in New York’s cannabis industry. Yet, despite the establishment of the Social Equity Cannabis Investment Fund, the administration has failed to provide the necessary financial support to licensees, leaving too many without the resources to succeed. The failures in execution and lack of accessible funding for justice-impacted entrepreneurs undermine the very foundation of cannabis equity. We urge the legislature to take bold action to implement reforms that provide direct financial relief to licensees, ensure long-term sustainability for social equity businesses, and protect the integrity of the CAURD program,” said Eli Northrup, The Bronx Cannabis Hub.

The full testimony, submitted on behalf of the following individuals and groups, is available upon request. 

• Amy Chin, Managing Director of High Exposure Agency
• Annette Fernandez, Managing Director of High Exposure Agency
• Black Cannabis Industry Association
• Bob Poncé, Producer, EmpCannabisNY Podcast
• Eli Northrup, The Bronx Cannabis Hub
• Emmanuela “Venus” Isichei
• Jason Starr, Chief Impact Officer, On the Revel, Inc.
• Kassia Graham, Managing Director of High Exposure Agency
• Kavita Pawria-Sanchez, The Canna Bronx Collective
• Reginald Fluellen, Ph.D., CEO, Cannabis Social Equity Coalition – NYS
• Saki Fenderson, Director of Events, On the Revel, Inc.
• Social Equity Empowerment Network of New York (SEEN NY)
• Toni Smith, NY State Director, Drug Policy Alliance