State cannabis officials are trying to attract more investors to New York to help dispensary operators get their businesses up and running – a process that has been slower than anticipated.
But state rules make it difficult for some established cannabis investors to enter the retail market. And New Yorkers who have marijuana dispensary licenses say they are receiving unsavory offers from the investors interested so far.
“One thing we are warning our members about is predatorial and shark-like tactics, parasitic tactics that investors are using to take their equity,” said Jeremy Rivera, a co-founder of the New York CAURD Coalition, an independent group that provides services to those in the state’s Conditional Adult Use Retail Dispensary program, or CAURD. All CAURD licensees must have a past marijuana conviction or a family member with a past conviction and experience running a successful business.
New York could be a major part of the legal cannabis market in the U.S., which brought in about $30 billion in 2022, according to a recent report from the industry publication MJBiz Daily. Ahead of the launch of New York’s adult-use market in December, the outlet projected that legal sales here could top $1 billion in the first year, growing to more than $2 billion by 2026.
But Rivera said some of the investors he’s spoken to at cannabis conferences have raised concerns about the illicit market eating into legal sales – something New York lawmakers are trying to address.
“Their evaluations of what they feel the business is worth are really low,” and as a result they are offering CAURD licensees unfavorable terms in exchange for startup capital, he said.
Dan Morena has a license to open a dispensary in Manhattan and is in the process of raising funds. He said he has found some promising investors but fielded several shady offers in the process.
Morena said a common proposal he has heard from investors is to offer funding in exchange for a 49%…
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