350 pot shop locations identified across New York State

Hundreds of locations across the state have been "shortlisted" as potential sites for recreational pot shops, state officials said.

The real estate firm CBRE screened more than 10,000 sites, conducted evaluations of 2,300 properties and is "initiating negotiations with 350 property owners in anticipation of leasing sites," the Dormitory Authority of the State of New York, which is overseeing the process, said in a report.

DASNY didn't respond to questions about how many, if any, of these spaces were on Long Island. The state has so far issued licenses for seven shops on the Island.

As part of the state's social equity goals, the public construction authority is propping up 150 "conditional" licensees, business owners who were convicted of — or related to someone convicted of — offenses under the old marijuana laws. These entrepreneurs can expect the state to sublease a storefront to them, as well as provide "a suite of wraparound, capacity-building services," according to an FAQ released by DASNY.

The state is prioritizing dispensary locations on busy streets or near transit hubs, and those that are least likely to concern neighbors, the FAQ said. 

Private investors were tapped to launch a Social Equity Cannabis Investment Fund, which will locate and lease the sites. The fund will have one of 10 preselected design-and-construction teams verify that a space is suitable for a storefront. It will then present information on the location to licensees who want to operate in the vicinity.

Entrepreneurs will receive an estimate of the upfront cost to revamp and furnish the store, which they would have to repay with interest over 10 years. They'll have seven days to accept or decline the location. Licensees who turn down a site will be put back on line for future storefronts, the FAQ said.

Regulators have issued seven of up to 20 conditional retail licenses available to businesses on Long Island. Fifty-nine firms listed business addresses in Nassau County and 72 used business addresses in Suffolk County on conditional license applications, according to an annual report from the Office of Cannabis Management, which oversees marijuana and hemp policy.

The fund will offer an interest rate "equal to or less than the market rate of a similar loan," the FAQ said. Banking and financial experts told Newsday that cannabis companies would struggle to get loans from traditional business sources, and that they may pay interest rates in the teens. One conditional licensee told The Cannabis Insider trade publication that the fund described a 10% rate.

Such terms aren't appropriate for social equity businesses, according to Reginald Fluellen, senior consultant to the Cannabis Social Equity Coalition — NYS, an organization supporting people "most harmed" by the prohibition of marijuana. He said the state should've been more creative about jump-starting "low interest or zero-interest loans" called for in the measure that legalized recreational marijuana.

"(Regulators) need to have these funds available at the front end, rather than later on, to enable the social equity population to be sustainable and to be competitive," said Fluellen. "We still feel that there are some real, real problems with the amount of debt that these CAURD (conditional adult-use retail dispensary) licensees are walking into."

Interest rates haven't been finalized, DASNY spokesman Jeffrey Gordon said.

Conditional licensees can suggest dispensary locations to the fund. If the state decides the spots aren't suitable, the entrepreneurs may pursue leases without financial or other assistance from the fund, the FAQ said.

Those working with the fund will have loan payments, rent bills and fees for services coordinated by the fund.

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.