By: Benyamin Davidsons

Gov. Kathy Hochul’s administration has quietly put an end to a multimillion-dollar fund that was set up to loan money to help disadvantaged persons open up cannabis stores. The program, overseen by the state Dormitory Authority (DASNY), became the subject of a bombshell report last month, when an article in The CITY reported the loans were actually high interest loans— even allegedly predatory— and that the program was potentially bleeding state cash.

Per the NY Post, the DASNY entered into a financial agreement with a private equity firm for the program, and the company hiked up costs for potential store owners with high-interest loans backed by the state. State Sen. Liz Krueger (D-Manhattan), who had in 2021 been one of the main supporters of New York’s legalization of cannabis, told The Post Monday that the Dormitory Authority is no longer issuing loans to open cannabis shops through its $200 million Social Equity Cannabis Investment Fund. “It certainly seems predatory,” Krueger said of the program’s funding set-up. “DASNY is not doing any more of these deals at this point,” she added.

The funding project, which is now seen as a total flop, is expected to be at the forefront when NY Secretary of State Robert Rodriguez testifies in front of state senators on Tuesday. Rodriuez, a Hochul ally who formerly served in the NY Assembly, was appointed in April to serve as DASNY’s acting president and chief executive officer. The agency provides financing and construction services to public and private colleges and universities, non-profit health care facilities and other public institutions. Rodriguez, who became Secretary of State in 2021 and who was nominated for this new role in April, will still need to be confirmed by the state Senate to fill the new position in its full capacity.

Per the Post, the senate is expected to vote on his nomination sometime next week, but in the meantime, at Tuesday’s hearing, Rodriguez will be on the hook to answer questions about the alleged funding debacle, and how he will handle the matter.

“There will definitely be questions,” state Sen. Gustavo Rivera (D-Bronx) told The Post. “I’d like to know how he’s going to manage it,” Rivera said.

State Sen. Jeremy Cooney (D-Monroe) added, “I’d like to better understand what our current obligations are.” Cooney added optimism that new leadership at DASNY will lead to positive change for the cannabis equity program. “I’m hoping we can have a very frank conversation,” Cooney said.

The scorching report by the CITY alleged that the state made an agreement with a private equity fund to chip in $50 million to the $200 million fund meant to give out loans for people who needed it most to open cannabis shops. The $50 million was loaned at a 15% interest rate. The fund then issued loans to renovate storefronts, but sometimes loaned more than three times what contractors actually needed for the jobs and at interest rates above 10 percent, per the CITY report.