February 16, 2023 (Updated: March 20, 2023)
Dear New York State Legislators,
We are writing as a broad coalition of cannabis equity advocates to share our assessment of what is needed to successfully and meaningfully implement the MRTA (Marihuana Regulation & Taxation Act). As context, CannaBronx, in partnership with CUNY School of Law’s Economic Development Clinic and Mothers on the Move (Madres en Movimiento), recently conducted a joint analysis of the Office of Cannabis Management’s (OCM’s) 282 pages of proposed regulations regarding licensing for growth, distribution, processing, and sale of cannabis in New York State, which were published in the State Register on December 13th, 2022. Knowing that these regulations will make-or-break who does and does not get to benefit from the promises of the MRTA, we recently submitted nearly 20 pages of community-based comments as part of the rulemaking process, which were signed on by 25 partners representing thousands of New Yorkers.
The NYS Office of Cannabis Management has gone to great lengths to stay true to the intent of the law and has made tremendous progress. Our analysis yields issues that we believe must be addressed in order for the State to ensure that the MRTA’s clear intent to prioritize “communities disproportionately impacted” by the cannabis prohibition is realized. In addition, neither the proposed regulations nor public actions to date indicate the extent to which the State will be providing the immediate, desperately-needed financial and technical assistance to “social and economic equity” applicants that would allow them to enter the market at its inception. We know that market forces being what they are means that unless said applicants can enter the market at its launch, they will be crowded out before they can even get in.
Based on more than 100 interviews with legacy operators in the Bronx over the last several years, cannabis business owners, regulators, academics, policymakers, cooperative development and industry experts and others in New York State and legal markets around the country, we can confidently say that those who have licenses or are seeking to apply for licenses - with this particular demographic in mind - do not have the necessary wealth, financial, or technical understanding to gain a foothold in the industry on their own.
New Yorkers will need a minimum of hundreds of thousands of dollars to even consider the possibility of applying for a license when accounting for the numerous requirements to obtain one. All these requirements placed on social equity applicants are barriers to obtaining a license. Although the price tag is in the many millions for these programs, steps must be taken to ensure that money is secured in the upcoming budget as lack of funding, financial, and technical assistance, may lead to the failure of businesses created by current license holders and future applicant, and the potential for a monopolized market that fully undermines the promise of the law.
As far as we understand, the proposed NYS budget does not include any funding whatsoever to support cannabis equity to fully realize the goals of the MRTA. Further, OCM’s proposed budget is currently ~$60-70M and does not currently include programmatic or financial supports for the very communities the MRTA was meant to serve. Additionally, it is clear that DASNY is unlikely to be able to provide sufficient resources that are critical to the industry’s success, particularly given the recent doubling of CAURD licenses. This budgetary reality will undoubtedly undermine our shared hopes for our communities. As such, we are calling on legislators in both Houses and the Governor to ensure that this year’s State budget includes an investment of a minimum of $180M in funding, including the following priorities:
- ($60M) Technical Assistance is legally required by the MRTA. Robust, extensive technical assistance and mentorship is immediately needed to ensure that social and economic equity applicants have the necessary support through the application and business development process. Acknowledging OCMs future plans to stand up incubators, we propose scaling existing incubation programs to add to this limited capacity.
- ($20M) Community Education and Outreach funding directly to trusted community organizations on the ground to address limited understanding of the law and its possibilities among impacted communities to help create a real pipeline to licensing.
- ($100M) Seed & Application Assistance Funds to supply loans and grants via placement of funds at the Empire State Development Corporation (above what is being offered to CAURD licensees) focused on individuals who want to apply in the general licensing process (estimated to be in October 2023) but need funds to pay for specialists such as attorneys to successfully submit applications, due to the onerous nature of the application process.
- (TBD) Tax Credits for Businesses Hiring Disproportionately Impacted Communities to incentivize companies in New York's emerging regulated cannabis industry to hire individuals from the communities most impacted by anti-cannabis enforcement, we recommend the deployment of state tax credits. For example, businesses could get such a credit by hiring individuals from Cannabis Workforce Initiative certified programs created in coordination with WDI and the Department of Labor, similar to existing NYS hiring incentive initiatives.
- Other Programmatic Needs to position disproportionately impacted communities to apply and succeed, as identified by the OCM based on their expertise.
We understand that some of the above is “in the works” but believe that resources need to reach communities faster and at appropriate scale. We invite further discussion and hope that we can advocate together for robust funding in this upcoming budget, as outlined above.
Sincerely,
Kavita Pawria-Sanchez, CEO, CannaBronx | kavita@cannabronx.org
Wanda Salaman, Executive Director, Mothers on the Move
CUNY School of Law Community and Economic Development Clinic
ORGANIZATIONAL CO-SIGNATORIES as of 2/16/23
TakeRoot Justice
Derek Perkinson, National Action Network
Reginald Fluellen, Ph.D., Cannabis Social Equity Coalition - NYS
Jane McKillop, Lehman College
Terrence Coffee, Cannabis Justice Equity Initiative
Nicole Ricci & Ambra Melendez, NY Small Farma
Jeff Garcia, Latino Cannabis Association
Sonia Ferguson, Banana Kelly Inc
Cecilia Cortes, New York Women's Foundation
Juan Nuñez, Northwest Bronx Community Clergy Coalition (NWBCCC)
Shaquanna Thomas, Cannabis Justice Equity Initiative
Pilar DeJesus, All That Jive, Inc.
JaLoni Owens, Law for Black Lives
Imani Dawson, Community Education Advocacy Symposium and Expo (CEASE)
Shelley Miller, The ICA Group, Inc.
Beck Hickey, Mary Says / Zen+Mary
Toyin Ajayi, NYU CannaPolicy
Daniel M. Barber, Citywide Council of Presidents
Jessica Rosdy, Da Bodega Union
Jorge Luis Vasquez, Jr., Vasquez Segarra LLP
Michael Partis, Bronx Cooperative Development Initiative
Neville White Jr, Black Bodega
Georges Clement, JustFix
Jeffrey Hoffman, Attorney
Michael PoppaDukes Serrano, NYC Talent Collective
R. Kheperah Kearse, Kush & Kemet LLC
Stacey St. Louis, Compact Comforts
Sheryll Durrant, Just Food
Maria Forbes & Harriet Heyward, Clay Ave Tenants Association, Inc.
Dana G Elden, President, St. Mary's Park Houses Resident Council
Eduardo Vargas, Holm Grown LLC
Colin C Ransom, CNA Services
Jo Green & Rachel Garcia, Exit 18 Creative Co
Karyn Williams, Eric S Pierson, Joseph Fobbs & Garth Boland, Jr., Delta-9 Excelsior Corp
INDIVIDUALS as of 2/16/23
Adam Hudyih
Alexandra Taralesca
Alpheaus E. Marcus
Ana Pavon
Anna Burnham
April Parker
Christoper Caraballo
Corey Ransom
Cornelia Middlebrooks
Dalyla Santiago
Dariella Rodriguez
Esther Johnson
Jason Morales
Jason Algarin
Jesse Fenty
Jesse Moore
Kiara Grant
Liriam Quintanilla Figuereo
Mabel Rodriguez
Marcela Jimenez
Misaël Syldor
Phllip Ilenas
Raquel Morote
Raymond Sanchez
Alexandra Taralesca
Robert Forbes
Sophia Wagner
Tanisha Miles
Yvette Llena