Hochul admin quietly puts brakes on alleged ‘predatory’ cannabis funding program
The Hochul administration has quietly put the brakes on a multimillion-dollar fund that was designed to help disadvantaged people open pot shops — and instead allegedly ended up predatory and potentially bleeding state cash.
Last month, bombshell reporting by The CITY revealed that officials at the state Dormitory Authority (DASNY), which oversees the funding program, had entered into a financial agreement with a private equity firm that jacked up costs on potential store owners with high-interest loans backed by the state.
State Sen. Liz Krueger (D-Manhattan), who championed New York’s legalization of cannabis in 2021, revealed to The Post on Monday that the Dormitory Authority is no longer issuing loans to open cannabis shops through its $200 million Social Equity Cannabis Investment Fund.
“It certainly seems predatory,” Krueger said of the program’s funding set-up.
“DASNY is not doing any more of these deals at this point,” she added.
The alleged funding debacle is expected to be front and center when Hochul ally Robert Rodriguez testifies in front of state senators Tuesday before he is confirmed to take over the Dormitory Authority.
“There will definitely be questions,” state Sen. Gustavo Rivera (D-Bronx) told The Post.
The blistering reporting from the CITY showed that the state entered into an agreement with a private equity fund to chip in $50 million to the $200 million fund meant to provide financing for people who needed it most to open cannabis shops. The $50 million was loaned at a 15% interest rate.
Loans to renovate storefronts were then issued from the fund, sometimes more than three times what contractors actually needed to do the job and at interest rates upwards of 10%, according to the CITY’s reporting.
“I’d like to know how he’s going to manage it,” Rivera said ahead of Tuesday’s hearing, referring to Rodriguez.
State Sen. Jermey Cooney (D-Monroe) added, “I’d like to better understand what our current obligations are.”
Cooney said he’s optimistic that fresh leadership at DASNY will be positive for its role in the cannabis equity program.
“I’m hoping we can have a very frank conversation,” he said.
The state Senate is expected to vote on, and likely confirm, Rodriguez’s nomination sometime this week.
