Extra Extra! New York begins issuing first adult retail licenses
As a New York-based cannabis finance company, Canna Business Resources is a definitive resource for cannabis operators in the United States, having provided over $100 million in funding in 2021 to operators in nearly every state and of all verticals and on track to eclipse that amount this year. As we approach the Benzinga Capital Conference, we are acutely aware of the new recreational cannabis opportunities presented to the New York market.
People who have been directly affected by New York’s war on drugs can now submit applications for the first round of retailer licenses in the state. These licenses are referred to as “Conditional Adult Use Retail Dispensary Licenses (CAURD)”.
New York regulators have been promoting the app portal’s launch for weeks, stressing it’s a key step to ensure industry fairness as the state prepares to open up its market for adults by the end of the year.
Up to 150 licenses will be awarded in 14 regions across the state, with most concentrated in New York City boroughs like Manhattan, Brooklyn and Long Island. Queens will have 16 licenses and Mid-Hudson will have 17.
People who receive CAURD licenses will be able to access a $200 million social equity cannabis fund. In order to qualify for the Special Retail License, applicants must have faced a conviction for a cannabis-related offense before legalization was enacted in the state, or have a direct relative with such a conviction, and they must also have experience operating an eligible business. To further ensure that those most affected by criminalization are able to compete as the market opens and matures, conditional licenses should be reserved for applicants of which at least 51% are owned by persons involved in the justice, as stated in the measure.
Additionally, from a product offering perspective, the first 15 adult-use conditional processor licenses have already been approved in the state. For New Yorkers, this means processors can now create branded products from the 242 licensed growers and distribute those products through the authorized network of retailers.
The challenge, of course, is getting this product to market. Finding a suitable location, going through the application process, arranging the appropriate financing, opening and then procuring the necessary inventory are all critical to the early success of retail operations, and for now, the ability to executing this plan on a large scale remains untested in the vast New York market.
New York Conditional Adult Use Retail License Summary
New York is poised to be at the top of the cannabis food chain
Unsurprisingly, a relatively wealthy state like New York should be a giant in cannabis consumption. According to market research on behalf of the New York Medical Cannabis Industry Association, it is estimated that the cannabis market in New York could reach $1.2 billion in 2023 and reach more than $4 billion by 2027. Moreover, some estimates put the numbers much higher, at $7 billion in the coming years. These estimates are preliminary and based on these numbers, New York would be one of the largest individual cannabis markets in the world.
Source: MPG Consulting.
What does that mean? Bringing a product to a limited and rapidly growing licensing market with such growth momentum will be costly. Although the Social Equity Cannabis Fund has allocated $200 million to these companies, it is still unclear how this will be allocated, how long it will take to apply, underwrite and receive funding, and how much will be available per project.
Canna Business Resources brings its New York expertise
“As a New York-based investment firm and lender to the cannabis industry, CBR’s management team has been tracking the New York market for years,” said Michael Tew of Canna Business Resources. We are incredibly thrilled to see this industry come to life in such a fantastic and fair way and we look forward to being part of New York’s largest cannabis community.
In addition to the capital available for court-challenged licensees, CBR is proud to offer premier financing terms to its New York colleagues as they seek to expand existing operations or launch new ventures. .
CBR offers a strong sourcing, underwriting and structuring team to meet the capital formation needs of large and small cannabis operators across the value spectrum. It uses a unique underwriting process that defines and designs customized, non-dilutive lending solutions to help cannabis businesses grow. With its extensive experience, CBR can provide a financing term sheet within 24 hours of an initial introduction to its underwriting team.
Tew says, “We know the markets, we know the operators and we know the dynamics of the industry. Our solutions have become a definitive capital resource for hundreds, if not thousands, of cannabis companies since our launch in 2018.”
The entire team of professionals is looking forward to meeting a host of new people at the Benzinga Capital conference. New York, Massachusetts, Pennsylvania, Illinois, Missouri – any market.
For more information on CBR’s funding options, contact Michael Marini at [email protected] or 347-826-3504
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