Criticism Mounts Over New York’s Social Equity Cannabis Fund for High Costs and Limited Impact

LOS ANGELES- New York’s Social Equity Cannabis Investment Fund, a public-private initiative launched to support individuals disproportionately affected by cannabis prohibition, has faced growing criticism over its high operating costs and limited results. Since its establishment in 2022, the fund has managed to open only 21 dispensaries, despite an initial target of 150 locations. This performance has sparked public scrutiny, particularly regarding the $1.7 million in combined salaries paid to the fund’s management team over the past year, which includes NBA Hall of Famer Chris Webber.

The fund’s structure, a blend of public and private investment, was initially lauded as a model for supporting social equity applicants within the state’s cannabis market. By channeling resources into communities historically impacted by the war on drugs, the initiative aimed to provide pathways for equitable business ownership. However, the high operating expenses and slow rate of dispensary openings have raised questions about its efficiency and priorities.

Concerns have also surfaced around the fund’s financial obligations for operators, many of whom face substantial upfront costs for location buildouts. The buildouts, often necessary to meet regulatory and commercial standards, have proven costly, creating additional burdens for operators even before they begin to generate revenue. Furthermore, some operators have cited restrictive loan terms attached to the fund’s financing as another hindrance, suggesting that such conditions could counteract the intended support for new businesses by limiting their flexibility and growth potential.