A new fund dedicated to advancing social equity and led by an NBA veteran and a leading municipal firm is moving into New York State’s growing cannabis industry.

Social Equity Impact Ventures, LLC, a premier minority-led investment team, will sponsor and manage the New York Social Equity Cannabis Investment Fund.

This first-of-its-kind $200 million fund will be managed in a joint endeavor between a firm led by former NBA player Chris Webber and entrepreneur Lavetta Willis and Siebert Williams Shank & Co. LLC. Its goal is to finance retail shops to be operated by individuals who have been impacted by what New York lawmakers say has been the inequitable enforcement of marijuana laws.

“As the regulated, adult-use cannabis business sector grows, the right approach should include eliminating barriers for equitable participation in this multi-billion-dollar industry,” Suzanne Shank, president and CEO of Siebert Williams Shank, told The Bond Buyer.

The fund was authorized as part of the state’s fiscal 2022-2023 budget. It is a public-private limited partnership aimed at helping social equity entrepreneurs succeed in the state’s newly created adult-use cannabis industry.

The legislation authorizes the state to invest in a private fund to finance the leasing and equipping of up to 150 retail dispensaries.

It will be funded by up to $50 million in fees and revenue from the adult-use cannabis industry and up to $150 million from the private sector, which will be raised by the fund managers.  

The fund will help those who have a Conditional Adult Use Retail Dispensary License meet the costs of establishing retail dispensaries and fit-out of the spaces.

“The Cannabis Social Equity Investment Fund will be a key tool to help level the playing field during New York State’s licensing and siting of cannabis retail dispensaries across the state,” Shank said. “This regulatory design will help disadvantaged entrepreneurs to compete fairly.”

In May, the Dormitory Authority for the State of New York issued a request for proposals seeking a fund manager to sponsor and manage the $200 million fund. It is part of the state’s ‘Seeding Opportunity Initiative,” to create business opportunities for people who have been arrested or jailed for cannabis-related offenses. 

The announcement of the fund managers was released at DASNY’s Manhattan offices on June 22.

“New York takes an important step forward in creating jobs and opportunity for those who, historically, have been disproportionately targeted for cannabis infractions,” New York Gov. Kathy Hochul said in a statement. “As we create a new industry in New York, I am proud to see real progress in addressing the economic needs of our future entrepreneurs.”

Hochul also announced the appointment of new members to New York’s Cannabis Advisory Board, which will work with the Office of Cannabis Management to establish an equitable and inclusive legal cannabis industry in New York.

Under the law, funds raised through taxes on cannabis products and from licensing fees are to be directed back to communities across New York, with 40% of the funds going to the state’s Community Grants Reinvestment Fund, which will be disbursed by the Cannabis Advisory Board; 40% going directly to school districts in municipalities that did not opt-out of cannabis sales; and 20% going for drug treatment programs.   

DASNY President Reuben McDaniel III said New York was alone in addressing key barriers of accessing capital that have held back minority and women entrepreneurs in other states. 

“I’m proud of DASNY’s role in a program will help build generational wealth that has been out of reach for far too many of our citizens and that will succeed in creating social equity when so many other states’ programs have failed,” he said.

DASNY ranked as the number one issuer of municipal bonds in 2021. DASNY sold more than $8 billion of bonds last year that funded school districts, higher education and non-profit organizations.

Shank echoed that sentiment, noting that the firm has asset management experience and created a fund a few years ago that raised capital to help minority-owned businesses across the county.

“This for us is another phase in our efforts to help the government with this industry, which we think will do extremely well all across the country, but people that look like me are not often at the table,” she said.

“I’m incredibly honored to work with New York’s esteemed officials to right the wrongs for individuals who were unjustly victimized by outdated cannabis policies,” Webber said. “New York’s thoughtful and inclusive approach to establishing equity in the cannabis space and creating opportunities for those affected by the ‘War on Drugs’ is truly unparalleled.”

The Cannabis Engineers Extractors & Distributors Local 420 also praised the initiative, saying the new venture will allow the cannabis industry to be more competitive for entrepreneurs and not be dominated by big financial players.

“The cannabis industry is projected to become a big business across New York representing some $4 billion-$6 billion of economic impact annually and 30,000-50,000 jobs of all types being created,” CEED Local 420 said in a statement.