Whatever Happened to CAURD Part II
Ummm, whatever happened to The Fund?
Part I in case you missed it
What is CAURD again? (pronounced like card) Conditional Adult Use Recreational Dispensary, NYS’s cannabis social equity program.
Who has a legal dispensary? I do with my business partner Chef Marq Hayes.
When is your dispensary opening? Perfect segway into Part II
Where is it ? Southampton, LI. We will be the fourth legal dispensary on LI in NYS cannabis market. Everything else is elicit. As of July 5th, 2024, there are 141 legal dispensaries in all of NYS. Every Friday, the OCM (Office of Cannabis Management) posts the latest openings.
The question whatever happened to CAURD goes hand in hand with whatever happened to “The Fund?” Without money, real estate, or resources how did OCM think this program would survive?
Diving Into The Fund
Warning - very shallow water here!
The Fund has two main components: Funds made available to eligible CAURD licensees, and real estate spearheaded by DASNY (Dormitory Authority of the State of New York).
Supporting New York’s Cannabis Social Equity Entrepreneurs
New York’s Cannabis Social Equity Investment Fund helps individuals impacted by the disproportionate enforcement of cannabis prohibition lease and equip suitable real estate for retail adult-use cannabis dispensaries.
The Cannabis Social Equity Investment Fund
This up to $200 million Public-Private Fund, proposed by Governor Hochul and adopted by the Legislature, provides much needed support for justice-involved individuals who have received a Conditional Adult-Use Retail Dispensary (CAURD) license from the State Office of Cannabis Management. The Fund was seeded with $50 million in State funds, to be repaid from tax revenue generated by cannabis sales, and up to $150 million in private investment. It is the first of its kind in the nation.
Participating CAURD licensees receive a premium turn-key cannabis dispensary in an optimum retail location, with the licensee repaying the Fund’s investment over time. This approach provides participating CAURD licensees with the best possible opportunity to succeed, overcome the unjust treatment of the past, and create generational wealth.
I’m pretty much a nerd and fact checker. Call me crazy for holding people and/or organizations accountable for their preachings, but I am not letting this one slide. That last paragraph is the doozy here. Though I do not know the exact number of dispensaries that were able to use the Fund to open, my guess is under 10. Our business, dba Brown Budda New York (BBNY), has not received any money or real estate from the Fund, nor have some 400 other provisional CAURD license holders. I did some research to back our experience during this process from application submission to spring of 2024 by creating a timeline of sorts. Here are the highlights:
Jan 5, 2022
New York plans $200 million fund to bolster marijuana social equity goals.
New York’s new governor plans to create a $200 million public-private fund to support the state’s ambitious social equity goals for its projected multibillion-dollar recreational marijuana industry. The adult-use legislation enacted last year sets a goal of awarding 50% of all licenses to social equity applicants in efforts to build a diverse industry and include communities and individuals impacted by the war on drugs.
May 13, 2022
Social Equity Cannabis Investment Program Request For Proposals Announced
The public-private program is a key component of the Seeding Opportunity Initiative, which is furthering the goal of the state’s Cannabis Law to facilitate business opportunities for individuals impacted by the disproportionate enforcement of the cannabis prohibition. The program will help them overcome barriers experienced by equity entrepreneurs in other states that includes accessing the capital required to source, lease, construct and equip suitable real estate for the dispensary locations for their retail cannabis business.
Nov 21, 2022
Keep It A 100 LLC - Marquis Hayes Social Justice Applicant (SJII) is awarded CAURD First of 36
November 21, 2022
That timeline took a positive turn when the state’s Office of Cannabis Management (OCM) announced it would allow qualifying businesses to launch delivery services before opening their retail stores, a significant change from other recreational markets. Regulators said 28 of the retail license winners went to individuals with marijuana convictions or family members who’d been arrested for cannabis.
One store opened before the year’s end, Housing Works through the non-profit program. Of the first 36, eight were non-profits. They had to show funding through their organizations as part of the application process and did not have access to the Fund.
Dec 2, 2022
5 key takeaways from our investigation into NY’s $200M social equity fund managers
A NY Cannabis Insider investigation this week brought to light a number of issues surrounding Chris Webber and Lavetta Willis, part of the team the state selected to manage its $200 million cannabis social equity fund. The investigation found that most, if not all, of the high-profile projects the NBA Hall-of-Famer and his business partner have launched in the cannabis space have never materialized
Dec 9, 2022
Temporary Delivery Only (TDO) is granted and OCM announces that change
From the get go, delivery was BBNY’s business plan. We advocated for ourselves at one of the first (of hundreds) of meetings and pushed for TDO to be in the regs. We got the ear of the right person and the request became a regulation within 24 hours. Literally.
December 14, 2022
Press: Suffolk Pot Shop Eyed
After a few interviews, we avoided press like the plague because no one knew anything. We also are not a “Manhattan couple,” as stated in the article. We had enough on our plates professionally and personally to say the least.
January 30, 2023
Chris Webber and Lavetta Willis-led New York Social Equity Fund Delayed
Despite the New York Governor, Kathy Hochul’s promise of $200 million to support social equity applicants in the state’s cannabis market, the Social Equity Cannabis Investment Fund is yet to deploy its first investment. The fund, which was appointed by Hochul to be managed by the Dormitory Authority of the State of New York (DASNY), was tasked to raise $150 million from private investors and $50 million from the state to fund leasing and renovations of up to 150 Conditional Adult-Use Retail Dispensaries (CAURDs).
DASNY appointed Social Equity Impact Ventures, which comprises of NBA Hall of Famer Chris Webber and entrepreneur Lavetta Willis and the investment banking firm Siebert Williams Shank to manage the fund. However, despite a deadline to secure capital commitments, the state has not yet secured the funding. Reuben McDaniel III, DASNY’s president and CEO, stated that they are still negotiating the final terms with their investor base.
March 28, 2023
A weed shop in the Hamptons? Not if residents have anything to say about it
If Kim Stetz gets her way, you’ll also be able to pick up some weed—legally—on your way to the beach.
“Hell yeah, we want to have a place in the Hamptons,” said Stetz, a psychotherapist who received one of 40 available dispensary licenses on Long Island and is looking to establish a cannabis shop in Southampton with her partner, chef Marquis Hayes. “[Long Island] was my first choice.”
June 30, 2023
Public-Private Partnership Supports Development of Dispensaries for Justice-Impacted Entrepreneurs
Chicago Atlantic becomes the new $200M Fund
August 7 – Dec 1, 2023
The Injunction
Injunction lifted that blocked some New York cannabis licenses
An injunction blocking progress for New York state's recreational marijuana industry is lifted as a judge signs off on a settlement agreement between the Office of Cannabis Management and four veterans.
The state had been blocked from issuing, processing or reviewing Conditional Adult Use Retail Dispensary Licenses, known as the CAURD program, since Aug. 7, preventing hundreds of licensees from opening a business.
Nov 16, 2023 (one year later from being first of 36 no funding, no real estate)
But nearly two years after Hochul announced the fund, financing documents obtained by THE CITY reveal that the 10-year loans it offers to dispensary owners are highly restrictive and potentially burdensome, giving licensees little control over building out their own locations, instead requiring them to foot a bill handed to them by the state. The details of the confidential agreement have been a source of speculation for months, as delays in securing financing for the $200 million fund as well as getting legal stores open have continued to impede New York’s cannabis market.
March 20, 2024
The CAURD program was meant to help licensees by providing renovated locations for dispensaries and access to a $250 million loan fund. The MRTA was designed to "stave off corporate capture" and provide opportunities for those without access to other venture capital funding. New York required companies already dominating the medical marijuana market to wait three years before entering the recreational market, unlike other states that gave similar companies immediate business opportunities.
About 900 people applied for CAURD licenses during the first round of applications. But only three dozen applications were approved when the OCM announced the debut collection of authorized retailers in November 2022. According to The New York Times, there were supposed to be over 150 licensed dispensaries in the state by the summer of 2023. As of today, there are only 80 legal dispensaries open to the public, and some of them only offer delivery.
May 10, 2024
Governor Hochul Directs Operational Overhaul of the Office of Cannabis Management
$5 Million Grant Program to Help CAURD Licensees
“We promised to build the strongest, most equitable legal cannabis market in the nation, and we’re announcing long-needed steps to make New York’s cannabis program work as promised.”
The state will establish a new program to provide financial support to CAURD licensees who have secured their own retail locations. In recognition of the delays CAURD applicants faced on the road to opening their businesses, including those due to private litigation that substantially paused the CAURD program until December 2023, Empire State Development, working in close collaboration with staff from OCM, will make a $5 million pool of funding available to eligible CAURD licensees in the form of micro-grants. This one-time commitment of funding, which will come with no expectation of repayment if used for eligible purposes, will enable eligible CAURD licensees who have a license and have secured a location to receive a one-time grant to reimburse certain eligible initial costs that they have incurred. Additional information on the program will be shared with licensees by OCM as it becomes available.
Great! So here we are! We of course are not waiting for anything. The gig was rigged from the get go. Did we get a space on our own? Yes! Have we seen any of the Fund? No! We are entrepreneurs and flying by the seat of our pants. This “opportunity” is akin to building a plane while it’s flying in the air. Would it be amazing if we saw $750k to $1.5M from the Fund so we can open and have a beautiful dispensary in The Hamptons? Yes, it would! We are doing what every entrepreneur does, pitching our business. The catch is can’t get money from banks and real estate is rough unless the owner outright owns the property (which we hope to someday, too). What I have learned, people want in on this business because of the money making opportunity and because we are changing the narrative of cannabis from “weed," “pot,” “marijuana,” etc, to “plant medicine,” and “cannabis,” stemming from its scientific name, “cannabis sativa.” CAURD licensees are the mascots leading the way.
If you’re keeping up with WHTCPII, BBNY has a legit space in a properly zoned area with what’s called proximity protection which gives us a buffer zone where no other dispensary can set up shop within a certain radius. This is a miracle reader. The vultures and the naysayers want to take it from us. We’re doing our best to get operational. Crossing fingers sometime this summer because we have customers waiting!
Housekeeping from Part I: If you google, “how many black-owned dispensaries in the US,'' you will get results stating, “less than 2%” and “fewer than 20 out of the 10,000 medical and adult-use cannabis retail shops across the country are majority Black-owned” dated December 14, 2023. Original text stated businesses instead of dispensaries.
Thank you for reading. The research and work I put into writing and accuracy is entirely reader supported. If you enjoy the content I provide and are not ready to become a subscriber, you can make a one-time donation at Buy Me A Coffee. I appreciate your support through sharing my work, conversations, and following Bar Innocence. Metta, Kim