State seeks proposals for investors, builders
Social equity program seeks to help people open own businesses
The state Dormitory Authority is seeking proposals from investors, as well as design-build firms, that want to participate in a program to help formerly-convicted marijuana dealers open up legitimate retail outlets under the state’s new cannabis laws.
Specifically, the Dormitory Authority has put out two requests for proposals, or RFPS, relating to the Social Equity Cannabis Investment Program. This public-private program is a key component of an initiative to help people who were “justice-involved” to get first dibs at making a living under New York’s new cannabis law, which legalizes sale of the substance to adults for recreational use.
The Dormitory Authority is planning a $200 million fund, with $150 million available from private investors and $50 million from licensing fees and taxes on the sale of cannabis.
The idea is to course-correct on the fact that poor residents, as well as people of color, were arrested and imprisoned for selling or distributing marijuana in much greater numbers than middle-to-upper class residents and white people.
To help make up for this past imbalance, individuals or people with family members who had been arrested for sale or distribution of cannabis can now get some of the first retail licenses.
Other groups included in the equity plan include women or minority-owned business operators, disabled veterans and distressed farmers.
Overall, the state is hoping to have half of the cannabis sales licenses going to social equity entrepreneurs.
Similar efforts have been tried in other states but they haven’t gone well, with one of the reasons being that the fledgling cannabis retailers don’t have enough capital and lack the right location for a successful store.
That’s why the Dormitory Authority is seeking private equity partners to help fund the new licensees.
And they want to hire designbuild companies to locate and set up what would be the physical dispensaries that the applicants would take over and operate. That would entail finding and acquiring a good retail loca
tion and physically preparing it for doing business. The retailers under the equity plan will have to meet two criteria to qualify:
First, they must have a cannabis-related conviction that occurred prior to the March 31, 2021 legalization of marijuana, or had a parent, guardian, child, spouse, or dependent with a prelegalization cannabis-related conviction.
Additionally, they must have experience owning and operating a successful business in New York.
The RFPS issued this week are for two phases. One is for selection of a fund sponsor, general partner, or fund manager to manage the Social Equity Cannabis Investment Program. Proposals are due by June 8, with award of the RFP announced no earlier than June 20. The other RFP is for selection of design-build firms to support development of the retail stores.
The Dormitory Authority anticipates up to 150 dispensaries will be completed across the state.
Proposals are due by June 13, with awards of the RFP announced no earlier than July 11. The program will identify and lease locations throughout the state to be conditional adult use cannabis retail dispensaries for operation by social equity entrepreneurs. The fund also will advance money for the costs of construction, equipping and leasing of these sites for repayment by the social equity entrepreneurs.
For more information, contact the Dormitory Authority of the State of New York at the websites for the equity partners and design-build firms or go to https://www.dasny.org/index.php/opportunities/rfpsbids/2022/new-york-socialequity-cannabis-investmentfund and https://www.dasny.org/opportunities/rfpsbids/2022/design-build-services-retail-cannabis-dispensaries.