As budget talks to suppress New York's thriving illicit cannabis market continues, lawmakers are pushing to create a fund to help New Yorkers impacted by marijuana prohibition transition to the legal industry and curb operators without a license.

The Legislature backs Gov. Kathy Hochul's proposals to empower municipalities to expedite enforcement with the state Office of Cannabis Management and padlock illegal cannabis shops. Legislators held rallies in the Capitol throughout the week — pushing for different budget policies to close illicit stores for good and deter new unlicensed stores from opening. 

The Cannabis Social Equity Coalition is pushing for a $100 million fund in the budget to create a revolving loan fund for people affected by the war on drugs who want to grow, process or sell legal adult-use products and cover expenses like start-up costs. The organization wants $50 million for zero-percent or low-interest loans for Conditional Adult Use Retail Dispensary applicants and $50 million for job training. 

"This is not state taxpayer dollars that are going to go out the door that you'll never see again," Senate Cannabis Subcommittee chair Jeremy Cooney said. "This is about revolving and creating opportunity, both upstate and downstate, for Black and brown cannabis entrepreneurs." 

Cooney's proposal would initially create a $500,000 program.

Lawmakers argue support for Social & Economic Equity applicants must go hand-in-hand with eradicating unlicensed operators as legislative leaders consider a variety of proposals to quell illicit activity.

Fewer than 100 legal dispensaries are open across the state more than three years after adult-use recreational marijuana became legal. Meanwhile, thousands of illegal stores operate statewide. 

"How are we most able to help those most harmed by the failed war on drugs?" Cooney said. "I believe... that the way to do that is to give dollars to people right now so they can get their doors open and then allowing them to repay that at a lower interest rate so that others have the same opportunity."

The fund was not included in either chamber's budget proposal and materialized as budget discussions progressed. It's unclear how likely legislative leaders will include the proposal in the final spending plan.  

Gov. Kathy Hochul's office continues to probe mismanagement within the Office of Cannabis Management after reports of retaliation. And a Thursday state Supreme Court ruling threw another hurdle into agency operations.

A bipartisan group of lawmakers is pushing for legislation in the budget to revoke businesses of licenses to sell cigarettes, tobacco products, alcohol or lottery tickets if discovered selling cannabis illegally. They say it would combat the proliferation of smoke shops, bodegas and delis that sell marijuana without state approval. 

Assembly Majority Leader Crystal Peoples-Stokes said the bill should become law as quickly as possible.

"I'm not sure it'll be in the budget, but if it is, I'll be grateful," she said. 

Legal dispensary owners and applicants visited the Capitol this week and blasted the department and the Cannabis Control Board, arguing the state has broken a promise by failing to support entrepreneurs impacted by prior drug laws — the majority of whom are Black and brown New Yorkers.

Alexander Anderson, executive director of Reentry Theater of Harlem that works with formerly incarcerated people, served a combined 15 years in state prison for marijuana possession and drug crimes.  

Anderson applied for a Conditional Adult Use Retail Dispensary license to sell cannabis — a state program which prioritized initial licenses for justice-involved New Yorkers. He said OCM has not responded to his application to date, and the agency bolsters systemic barriers that hinder the progress of people impacted by marijuana prohibition.

"From arbitrary eligibility criteria to unresponsive agencies, the hurdles we faced serve as a stark reminder of the inherent injustice embedded within the cannabis industry," Anderson said. "...The denial not only perpetuates the cycle of injustice for me and my family, but also undermines the fundamental goals of the [Marijuana Regulation and Taxation Act]." 

OCM did not respond to a request for comment.

Josh Mirsky, who co-owns Stage One Dispensary in Rensselaer County, said black market cannabis sales will persist in mature markets — pointing to California's $8 billion lost in revenue to illegal operators. 

"We're black market vets — we're not going to shun that," Mirsky said. "That exists. There's room for everyone to do it, but it's just like there's etiquette, you know? And what we see is a lot of these people who are doing a cash grab. The bottom line is, we have integrity around the plant. We have love for the plant, we always have loved the plant. That's why we do this for a living."

The Legislature supports Hochul's plan to boost municipal enforcement, but Peoples-Stokes argues local police and district attorneys have the power they need to shutter illicit stores and the clarification isn't needed. 

"They take the same oath that we take, to uphold the laws of the state and the Constitution of the state of New York," Peoples-Stokes said. "If anyone needs some additional language to understand what their job is, tell me what that language is. But I don't think it's necessary."

The Assembly leader would not provide details about ongoing negotiations, but said discussions continue about enforcement for illegal smoke shops, not just traditional bodegas. 

"I'm not sure how that's going to look yet... but controlling illicit and illegal businesses?" she said "It's a must, and it's a must and it's a must."

EDITOR'S NOTE: This story corrects an earlier version to reflect that the Cannabis Social Equity Coalition wants a $100 million fund. Sen. Jeremy Cooney has proposed creating the fund with $500,000 initially.