New York Opens Applications For $5 Million Community Reinvestment Grants Program Funded By Marijuana Tax Revenue

New York’s Office of Cannabis Management (OCM) is now accepting grant applications for a $5 million community reinvestment program funded by marijuana tax revenue. The effort, which will support services such as mental health, workforce development and housing for young people, is part of an push to reinvest state cannabis monies in areas “disproportionately affected by prior federal and state drug policies in order to redress a wide range of community needs.”

“If anyone needs another reason why buying cannabis from licensed dispensaries is the best option, here you go,” Tabatha Robison, OCM’s director of economic development, said in a statement about the program. “Every dollar spent in a legal shop contributes to the important work of reinvesting in communities harmed by prohibition.”

Regulators on Wednesday announced a request for applications from eligible nonprofits. Individual grants amounts will be $100,000. The 2024 grant cycle, OCM said in the announcement, “will prioritize counties identified as high need for youth services and those historically under-resourced and overpoliced.”

Grants are intended to serve groups statewide, the office said, with the goal of making “at least one award in each Empire State Development (ESD) Region.”

Eligible applicants must be 501(c)(3) organizations serving young people aged 0-24, focusing on mental health, housing, and/or workforce development.

A total of $5 million is available for 2024, with each award totaling $100,000.

For updates, visit: https://t.co/gY58PUhFE8

— NYS Office of Cannabis Management (@nys_cannabis) October 10, 2024

Applications are available through the program website.

Felicia A.B. Reid, OCM’s acting director, called the Community Reinvestment Program “a thrilling opportunity.”

“New York is putting cannabis tax dollars to work for the next generation,” she said in a statement. “This $5 million is the first of many down payments on the promise of what the future holds.”

The chair of the state’s Cannabis Advisory Board, Joe Belluck, said that youth “are an important place to start,” but added that “in future years look for a broader scope of issues to be part of our community reinvestment efforts.”

Awardees will receive the funds over a two-year period, with a portion being disbursed in a one-time advance payment and remaining funds distributed via quarterly “reimbursement-based vouchering.”

OCM’s announcement of the grant program last month came just weeks after New York Gov. Kathy Hochul (D) touted the state’s “smokin’ hot” marijuana sales numbers as the market reached an “all-time high” of over half a billion dollars in legal cannabis purchases since adult-use retailers launched in late 2022.

Under state law, 40 percent of all cannabis tax revenue is earmarked for community reinvestment, targeting “areas of the state that have been historically under-resourced, underserved, and over-policed,” according to the office.

New York has seen about $370 million in purchases this year, as of numbers released in August. Combined with last year’s total of about $160 million, that brings the net sum to roughly $530 million since the state’s market launched in December 2022.

In a separate report released earlier this month, OCM said the state’s marijuana legalization rollout has seen “growing pains” as well as “successful efforts.” While the state has run into a number of obstacles during the first years of legalization—including a slow market rollout, leadership controversies and so-called “predatory deals” around the state’s marijuana social equity fund—officials said they were confident New York’s market is poised for success.

The governor and regulators are attributing the industry’s recent growth, at least in part, to their efforts to stamp out illicit operators and expand the licensed marketplace. Hochul said in June that the state’s escalated enforcement actions against illicit marijuana shops is resulting in a significant increase in legal sales at licensed retailers.

The governor made the comments amid criticism from equity-focused activists over what they see as a “corporate takeover” of the cannabis market, citing reporting about the administration dismissing concerns from state officials about a “predatory” private equity loan deal the state approved to provide funding for startup cannabis retailers.

Certain advocates say Hochul has “falsely” blamed the legalization law itself for the state’s troubles with the illicit market, without taking responsibility for the administration’s role. To that end, there has been criticism of the governor’s ousting of Chris Alexander as executive director of OCM earlier this year.

In an attempt to rein in unlicensed sales, the governor in February called on big tech companies such as Google and Meta to “do the right thing” by taking steps to stop promoting illicit marijuana shops, which have proliferated across the state.

Meanwhile, New York officials are rolling out a broad plan to encourage environmental sustainability and set energy use standards within the state’s legal marijuana industry. It’s part of regulators’ broader goal of promoting economic, environmental and social sustainability in the emerging sector.

In June, state regulators also formally approved rules to allow adults 21 and older to grow their own cannabis plants for personal use.

A top New York lawmaker also introduced a bill in June to legalize psilocybin for adults, provided they obtain a permit after undergoing a health screening and educational course.

As for other social equity efforts around the state’s legal cannabis program, two state senators recently called for an investigation of the state’s marijuana social equity fund, saying loans to qualifying dispensary owners left them “trapped” in “predatory deals.” The program was announced in 2022 and created a $200 million public-private fund to specifically help promote social equity in the state’s cannabis industry.

Across the country, California officials in June awarded another round of community reinvestment grants to nonprofits and local health departments, funded by marijuana tax revenue. The Governor’s Office of Business and Economic Development (GO-Biz) announced the recipients of over $41 million in awards, the sixth round of cannabis-funded California Community Reinvestment Grants (CalCRG) under the state program. In March, officials awarded $12 million in marijuana tax-funded grants to cities across the state to support equity programs for people disproportionately impacted by the war on drugs.

And in Illinois earlier this year, officials announced that they’re awarding $35 million in grants to 88 local organizations, using funds generated from taxes on adult-use marijuana sales to support community reinvestment efforts.

The funding is being offered through the state’s Restore, Reinvest, Renew (R3) Program that was established under Illinois’s 2019 legalization law. It requires 25 percent of cannabis tax revenue to support areas most harmed by the “disproportionate damaged caused by the war on drugs,” the Illinois Criminal Justice Information Authority (ICJIA) said.

Since launching the R3 program, Illinois has awarded over $244 million in marijuana revenue-funded grants to that end.

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