Under fire for a slow rollout of the cannabis program, Gov. Kathy Hochul’s administration is offering new $100,000 low-interest loans to licensed marijuana operators who find their own locations to open shop.
Previously, such loans were only available for sites secured by the state Dormitory Authority of New York. But DASNY’s effort to raise funds and find sites has largely been a bust, marijuana industry players said.
The state Office of Cannabis Management is shifting $5 million into the the new loan program from an existing $50 million fund set aside for DASNY.
State regulators told weed operators of the new financing program during a private meeting on Tuesday.
The loans, which would cover capital costs associated with opening cannabis stores, would have a 5% interest rate and be paid back over five years.
“It’s definitely a step in the right direction,” said Osbert Orduna, a disabled U.S. Marine veteran who runs a home delivery cannabis service and also is licensed to open his own pot shop in Queens.
The rollout of the legal cannabis program has been frustratingly slow and rocky, industry insiders said.
New York state lawmakers approved the sale of medical marijuana in 2014 and then gave the nod to cannabis sales for recreational use in 2021 — but only under a strict store licensing process that critics say is unnecessarily cumbersome.
Last year, Hochul predicted that 20 new legal dispensaries would open every month by the start of 2023 — but only one shop was up and running at the start of the year, and a dozen others have since joined in, even though 215 cannabis licenses have been issued.
The state’s failure to follow through on OK’ing dozens of dispensaries for legal marijuana as predicted by Hochul last year has thwarted the roughly 200 New York farmers who grew 300,000 pounds of cannabis — the equivalent of more than 272 million half-gram joints.
They complained they were sitting on mountains of spoiled and aging marijuana crops.
Meanwhile, an illegal black market has flourished while the budding legal market has sputtered.
Mayor Eric Adams and city Sheriff Anthony Miranda said at least 1,500 stores of unlicensed city merchants are selling cannabis, many avoiding taxes that legal pot stores must pay — putting them at a price disadvantage.
One unlicensed pot shop even brazenly operated across the street from City Hall, before being raided and shut down.
The New York Medical Cannabis Industry Association said there are “likely tens of thousands of illicit cannabis businesses” operating out of bodegas, smoke shops and other storefronts in New York City. Some are selling tainted weed, a lab-tested survey of cannabis products by the group found.
State regulators are plotting an offensive to whack illicit weed operators — and the landlords who lease space to them — with massive fines and closures authorized under a new law recently approved by Hochul and the legislature as part of the state budget.