New York Cannabis Program Lands $150 Million Investment for CAURD Licensees

ALBANY, N.Y., June 30, 2023 – PRESS RELEASE – Gov. Kathy Hochul announced June 30 that Chicago Atlantic Admin LLC ("Chicago Atlantic") is investing up to $150 million in senior secured capital in the New York State Cannabis Social Equity Investment Fund. The legislation that allowed for the fund's creation provided for a $200 million cap of combined investments into it, including $150 million from the private sector. With Chicago Atlantic's investment, the fund will receive support to reach its funding goal of up to $200 million, which Hochul and the Legislature sought when it adopted legislation to create this first-of-its-kind support for individuals affected by the unequal enforcement of cannabis prohibition.

“New York has always strived to lead the nation in providing opportunities for those who have been unjustly denied privileges and opportunities,” Hochul said. “Today's announcement reinforces New York's commitment to building partnerships that benefit New Yorkers and setting right the wrongs of the past. I welcome Chicago Atlantic’s participation in this program and applaud their recognition of the value that New York's cannabis program will provide to so many.”

Together with the state's $50 million investment, which will be funded from state cannabis industry revenues, Chicago Atlantic's contribution will enable justice-impacted individuals who have received Conditional Adult-Use Cannabis Dispensary (CAURD) licenses from New York’s Office of Cannabis Management to receive turnkey dispensaries to start their businesses. The funds will be used to secure, lease, design, construct and furnish the CAURD dispensaries, which will be subleased to eligible CAURD licensees. The licenses will be issued low interest loans to repay set-up costs associated with the fund program.

Editor’s note: Since New York launched adult-use cannabis sales in December 2022, 11 retailers and five delivery licensees have become operational.

Chicago Atlantic, which has more than 50 employees and has deployed over $1.8 billion across more than 50 investments, manages a diversified portfolio of credit investments with extensive experience in the cannabis industry. Led by a management team with expertise in real estate credit, direct lending, and risk management, Chicago Atlantic has created a leading cannabis lending platform.

Chicago Atlantic's flagship investment vehicle, Chicago Atlantic Real Estate Finance Inc., is a mortgage real estate investment trust utilizing significant real estate, credit and cannabis expertise to originate senior secured loans primarily to state-licensed cannabis operators in limited-license jurisdictions in the United States.

Chicago Atlantic Founding Partner John Mazarakis and Managing Director Peter Sack said, "We are proud to support the governor's initiative as well as New York's CAURD licensees, the Cannabis Social Equity Investment Fund, the Dormitory Authority, the Cannabis Control Board and the Office of Cannabis Management in this transformational initiative. Social equity is the cornerstone of New York's cannabis industry, and here we aim to pair progressive licensing with progressive and innovative capital solutions. The success of New York's social equity initiatives and its CAURD licensees will benefit all industry participants and further support the development of the legal cannabis industry nationwide."

The Social Equity Servicing Corp. (SESC), a subsidiary of the Dormitory Authority of the State of New York (DASNY), is executing the work to develop dispensaries as an agent for the Cannabis Social Equity Investment Fund.

DASNY President and CEO Reuben McDaniel said, "Today is an historic milestone in the history of justice and social equity in New York State. I am proud to partner with Chicago Atlantic, an experienced company that will help fulfill the governor's and Legislature's vision of providing opportunity and hope for individuals hurt by the draconian drug laws of the past. Chicago Atlantic's financial commitment and the partnership we have created will help open doors for so many who have faced unsurmountable obstacles of accessing capital and economic security."

McDaniel resigned June 15 from the five-member Cannabis Control Board, a position he had held since Hochul appointed him to the board in September 2021.