Former NBA star Chris Webber and an investment team have set out to raise money that will help entrepreneurs with marijuana convictions establish cannabis dispensaries in New York, state officials announced Wednesday.
Webber's firm, Social Equity Impact Ventures LLC, submitted the winning proposal to establish a $200 million social equity fund with the state's construction financing team, the Dormitory Authority of the State of New York (DASNY).
Using $50 million from the state and $150 million from investors, Social Equity Impact Ventures will line up and equip up to 150 marijuana dispensary locations throughout the state. New Yorkers who receive the first batch of recreational retail licenses may sublease these spaces from the state and repay the assistance through loans. The initial round of licenses is limited to New Yorkers who've successfully run a business and who have — or are related to someone who has — a marijuana conviction.
Mirroring state and national trends, Black and Latino Long Islanders were arrested for marijuana offenses more frequently than their white counterparts, according to research from criminal justice reform groups. The social equity fund is part of the state's strategy to ensure that those penalized during prohibition are not pushed out of the new industry.
“We’re calling this a success fund because that’s the only option," said Webber, who played for five NBA teams from 1993 to 2008. He was inducted into the NBA Hall of Fame last year.
"The only option is to make sure that not only do our applicants have wonderful access to financing and infrastructure, but also those quiet moments, those talks when you’re in doubt," he added, referring to the group's ability to listen and provide support and guidance.
His partners at Social Equity Impact Ventures include Lavetta Willis, who works with Webber at a second fund for cannabis-related ventures; Suzanne Shank, CEO of the minority- and women-owned investment firm Siebert Williams Shank; and William Thompson, another Siebert Williams Shank executive and a former New York City comptroller.
"We've been fighting to get to the table for so many years," Shank said. "Now that we're there, it's our mission to help others get to the table."
The fund managers are expected to secure $150 million in commitments from private investors by Sept. 1 and operate the fund for about a decade, according to guidelines included with the state's request for proposals. Social Equity Impact Ventures will receive up to 2% of the money raised, the guidelines said.
The state took other steps to launch the recreational marijuana field Thursday. The Cannabis Control Board, which oversees marijuana and hemp policy, approved 41 conditional cultivation licenses, one of which went to the Suffolk-based Big Sky Ranch Holdings LLC. The firm, which didn't immediately respond to Newsday's requests for comment, may now grow cannabis and perform minimal processing on the plant.
The Cannabis Control Board voted to accept applications for conditional processing licenses from June 28 to Aug. 31. To qualify, firms must have experience processing hemp, which comes from the same plant as marijuana and can be turned into CBD products believed to offer wellness benefits, but not a high. Once licensed, processors can extract tetrahydrocannabinol (THC), the marijuana compound with psychoactive effects, and create oil packages for vapes and other products.