Who, specifically, from the private investment industry is interested in getting New York’s $200 million cannabis equity fund off the ground? And, which company is up to the task of tracking the state’s cannabis from seed to sale?
These are just two questions that the state is seeking to answer with an RFP and an RFI issued in recent weeks, as the state prepares to release its proposed rules for the forthcoming adult use industry.
The Dormitory Authority of the State of New York (DASNY), which focuses on “construction, financing, and allied services which serve the public good of New York State,” released a Request for Information on the state’s $200 million cannabis equity fund. That RFI closes on March 16.
Gov. Kathy Hochul released details about this public-private fund as part of her broader budget plan, which would “promote equity and economic justice in New York’s cannabis industry.”
The seed money on the “public side” would come from licensing fees and tax revenue, according to the State of the State book. On the private side, the fund would also “leverage significant private investment.” While estimates vary, New York’s cannabis industry is expected to top $4 billion, and interest in the state’s forthcoming cannabis industry has been intense, with real estate companies and multistate cannabis operators already registering to lobby.
The RFI notes that DASNY is seeking to “determine interest and solicit information from qualified parties to form a privately held debt fund organized as a New York limited partnership to finance the establishment and development of retail cannabis dispensaries in the State of New York for the benefit of social and economic equity applicants selected and licensed by New York State Office of Cannabis Management.”
The RFI notice continues that the fund is “limited to the public policy goal of promoting and facilitating, for the benefit of communities and people disproportionately impacted by enforcement of the cannabis law, the use by social and economic equity applicants of sufficient land, building and equipment to properly conduct the commercial activity for which they have been granted a license.”
The notice is “not” a Request for Proposal (bold and italics are DASNY’s). The state’s Office of Cannabis Management and the Dormitory Authority would need legislative approval “currently under consideration by the New York Legislature to undertake the roles described” in the notice. If granted that authority, “DASNY will procure for these services through a formal Request for Proposal (RFP) process and will solicit responses from qualified and responsible vendors.”
So far, two entities are listed as “interested” submissions or suppliers: Carpentry & Millwork, Inc., a certified minority-owned construction company located in Mount Vernon, New York, and
the Law Offices of Diane Krausz, a New York entertainment lawyer located just south of the Flatiron Building in Manhattan.
On the cannabis tracking front, when a state’s regulators prepare to stand up a legal medical or adult use industry, one of the first steps is to select a company to track the cultivation, transportation, processing, sales, and also waste related to legal cannabis.
A request for proposal from the Office of General Services on behalf of the Office of Cannabis Management for a “cannabis seed to sale tracking system” went live in February, and four entities applied. They are:
Akerna, a Denver, Colorado-based software company that operates in “more than 17 states,” according to their site. MJ Freeway is under the Akerna umbrella.
Biotrack, a Fort Lauderdale, Florida-based company that has won contracts in states like Delaware, New Mexico, and for New York’s medical cannabis program.
Metrc, which stands for “Marijuana Enforcement Tracking Reporting Compliance,” is part of Franwell, Inc. and based in Lakeland, Florida. The company contracts with states like California, Massachusetts, Oklahoma, and Missouri.
SaniteX Global is an outlier among the group. It’s based in Australia and refers to itself on its site as “scale facilitation experts.”
Regulators are expected to release draft rules for the adult use cannabis industry “in late winter or early spring,” Freeman Klopott, spokesperson for New York’s Office of Cannabis Management, told Cannabis Wire. Regulators and lawmakers have been passing laws and rules ahead of the launch.
For example, Hochul signed a bill last month in preparation for adult use sales by allowing hemp growers to plant cannabis seeds for the 2022 growing season, with the goal of supplying the adult use market.
Meanwhile, New York regulators have expanded the medical cannabis program ahead of the launch of the adult use industry. Patients can now qualify for the program with any condition that their doctor thinks could be helped by medical cannabis, for example.
The next meeting of the Cannabis Control Board, within the Office of Cannabis Management, will be held on March 10 at 1 p.m.