NYC launches groundbreaking cannabis loan fund to boost equity in emerging industry

The New York City Department of Small Business Services (SBS), in collaboration with the New York City Economic Development Corporation (NYCEDC) industry has launched the Cannabis NYC Loan Fund, aimed at providing crucial financial support to early-stage cannabis businesses.

According to EDC.NYC press release, the fund, administered by cannabis-focused equity firm Tuatara Capital, offers up to $2 million in flexible loans to Conditional Adult-Use Retail Dispensary (CAURD) licensees, marking a major step toward establishing an equitable cannabis market in New York City.

“The legalization of cannabis has allowed a new economy to emerge in New York state while addressing the harmful impact of the ‘War on Drugs’ on Black and Brown New Yorkers,” said New York City Mayor Eric Adams. “But for too long, the intended beneficiaries of the new market have not been given the resources they need to truly succeed. That is why our administration has been laser-focused on creating an environment where legal businesses are able to thrive. With the launch of the ‘Cannabis NYC Loan Fund,’ we are giving up to $2 million in capital directly to the entrepreneurs who need it.”

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The loan fund will offer loans up to $100,000, with terms of up to three years and an interest rate capped at 9.5%, providing business owners with much-needed capital for startup and operational costs. Unlike other loan programs, the Cannabis NYC Loan Fund allows for unrestricted use of funds, prioritizing flexibility for CAURD licensees. This fund is part of the city’s larger effort to create an inclusive and supportive environment for legal cannabis operators.

NYCEDC President Andrew Kimball hailed the initiative as another milestone for the city’s evolving cannabis industry. “We are excited to provide cannabis entrepreneurs with flexible, low-cost capital that will enable them to contribute and compete in the industry and New York City’s vibrant, inclusive economy.”

Applications for the first phase of the fund are open until November 4, 2024, with a second phase expected in 2025, expanding the fund to $6 million for a wider range of cannabis businesses.

The Cannabis NYC Loan Fund joins other initiatives like “Operation Padlock to Protect,” which has shut down over 1,200 illegal cannabis shops, and the NYC LEASE program, connecting cannabis entrepreneurs with landlords of commercial spaces. Together, these programs are designed to support and regulate New York City’s rapidly growing cannabis market.