89 days and counting: DASNY still hasn’t turned over key documents in $200M fund investigation

NY Cannabis Insider will publish a story about this every day that the state does not turn over these records.

The Dormitory Authority of the State of New York (DASNY) has not turned over key documents related to its oversight of a $200 million cannabis fund for 89 days and counting.

Gov. Kathy Hochul, who announced at the start of her term “a new era of greater transparency and accountability” in Albany – and whose office has the ability to force DASNY to produce these documents – has not responded to NY Cannabis Insider’s questions regarding DASNY’s delay in producing the paperwork.

In June, Hochul picked DASNY to find a fund manager for the state’s Social Equity Cannabis Investment Fund. The fund manager is responsible for raising $150 million from private investors (with an additional $50 million coming from the state) to pay for leasing and renovating up to 150 Conditional Adult-Use Retail Dispensaries (CAURDs) – locations that will be handed over to licensees, all of whom have been impacted by the War on Drugs.

DASNY ultimately selected as fund managers Social Equity Impact Ventures, a team made up of NBA Hall of Famer Chris Webber, his business partner, entrepreneur Lavetta Willis, and a team from the investment banking firm Siebert Williams Shank.

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In December, NY Cannabis Insider published an investigation that found Webber and Willis have often failed to deliver on their biggest and boldest claims, including constructing a nine-acre cannabis “compound” in Detroit and investing in entrepreneurs of color with a $100 million fund.

The investigation also found that the pair have made several misleading or outright false statements about their accomplishments in the press; displayed evidence of financial mismanagement long before being selected for the job; and have apparently missed the state’s anticipated deadline of Sept. 1 for raising the $150 million.

Leading up to that investigation, NY Cannabis Insider submitted a Freedom of Information Law request to DASNY on Sept. 29 for documents that would show how the agency decided on Impact Ventures, and what the team put down as their qualifications.

The request asked specifically for: Impact Ventures’ response to DASNY’s Request for Proposals; all ranking and scoring criteria and outcomes; internal communication regarding the award; vetting materials; and the final contract between DASNY and Impact Ventures.

DASNY acknowledged receiving the FOIL on Oct. 7, and said it was “searching its files for records.” The agency said it expected to report on the “accessibility of any records gathered” by Nov. 7.

In November, DASNY pushed the date back to December. In December, the agency pushed it back again to January.

“It should not take months to provide you the information requested,” said Paul Wolf, president of the NY Coalition for Open Government. “The documents should not be hard to find and they most likely exist in an electronic format, which can be easily duplicated and provided.”

DASNY is the largest government building construction agency and the largest public-authority issuer of tax-exempt bonds in the country.

It is also a taxpayer-funded agency that is stonewalling the public’s right to know how it conducts business, including how it vetted and awarded the contract for arguably the most important piece of the puzzle that is NY’s cannabis marketplace rollout.

DASNY responded on Dec. 12:

DASNY has been and remains compliant with the requirements of FOIL. Consistent with FOIL, there are certain documents that are subject to exemption, including those that could impact negotiations or contain certain trade secret information. Similar to the 100+ FOIL requests we get each year, an analysis of the documents is conducted to avoid providing information that could harm the parties’ competitive position. We will provide this information when we have finished the required analysis.

In early December, the Office of Cannabis Management announced that conditional retailers can now secure their own locations, instead of waiting on DASNY to provide them, seemingly because the agency’s fund managers have not raised the $150 million, nor has DASNY secured enough locations.

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