During a little advertised Cannabis Control Board (CCB) meeting, the CCB announced and approved a Limited Partnership Agreement for New York’s Social Equity Fund. As a brief refresher, the Social Equity Fund was mandated by the Marijuana Regulation and Taxation Act (MRTA). On January 5, 2022, Governor Kathy Hochul announced that the fund would be, well, funded with $200 million of investments funds, $50 million of which would be invested by New York State from revenue deposited in the Cannabis Revenue Fund (from tax revenue).
As we detailed in our post on the Social Equity Fund, its purpose and mechanics, the Social Equity Fund will finance the Conditional Adult-Use Retail Dispensaries for which the Office of Cannabis Management (OCM) is currently accepting applications.
As was announced in June 2022, the Social Equity Fund will be managed by Social Equity Impact Ventures. So what is the purpose of the Limited Partnership Agreement? It formalizes the legal relationship between the Dormitory Authority of the State of New York (DASNY), which has been responsible for the government portion of the Social Equity Fund, and Social Equity Impact Ventures GP I, LLC.
A few interesting tidbits from the resolution approving the limited partnership agreement:
- The resolution specifically references New York’s $50m “investment in a private debt or equity fund,” which only highlights New York’s target goal of itself committing $50m towards funding CAURD licensees.
- Social Equity Impact Ventures GP I, LLC is identified as the general partner, which means that Social Equity Impact Ventures GP I, LLC will have operation control over the Social Equity Fund (presumably subject to numerous checks and balances; and
- The resolution specifically addresses that the purpose of the Social Equity Fund is to “fund the capital costs associated with establishing” CAURD licenses.
The approval of a limited partnership agreement is noteworthy only in that it is a clear indication that the OCM intends to move quickly upon the CAURD application window closing on September 26, 2022.