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.
