💸 The Tape

Curaleaf graduated the first class of its New York Incubator Program last month, a free six-month course for independent dispensary owners built with Jeremy Rivera of Terp Bros in Queens, and announced that applications for the next cohort open in December with expansion to additional markets under evaluation. It’s a modest press release about a modest program. It also happens to describe the model New York’s adult-use rollout needed from day one and never got.

What the program actually is

Thirteen independent dispensaries sent owners and general managers through six monthly modules from April to September: compliance and OCM reporting, assortment and pricing, retail operations, marketing, performance reporting, and accounting and tax. Sessions were run by Curaleaf’s own functional experts, structured as open discussion rather than lecture, and the graduates keep access to those experts after the fact. The closing session was held at Terp Bros in Ozone Park on September 23.

Boris Jordan’s line is the right one: “Independent retailers are essential to the future of this market,” and supporting them “requires action.” Rivera’s is better: “Independent dispensaries do not have to build this market alone.” That sentence is the whole story, because for three years, New York made them do exactly that.

How New York got here

New York’s Marijuana Regulation and Taxation Act was the most ambitious social equity framework in the country when it passed in 2021. The state reserved the first retail licenses for people with prior cannabis convictions through the Conditional Adult-Use Retail Dispensary program, promised a $200 million public-private fund to build out their storefronts, and deliberately kept the large multi-state operators holding medical licenses out of the adult-use market for the first phase.

The execution was a disaster, and that’s the governor’s word, not mine. The DASNY-backed social equity fund never raised the private capital it promised and delivered a handful of turnkey locations at costs far above budget. Litigation froze licensing twice: first a constitutional challenge over residency requirements, then a 2023 injunction won by service-disabled veterans who argued the state had illegally prioritized CAURD applicants over other equity categories named in the statute. Hundreds of provisional licensees sat for months with leases signed, loans accruing and no legal ability to open. Meanwhile an estimated 2,000-plus unlicensed storefronts opened across New York City alone, selling untested product at prices the legal market couldn’t match, and enforcement didn’t begin in earnest until 2024.

Governor Hochul’s own internal review in 2024 found the Office of Cannabis Management dysfunctional, led to the executive director’s departure and triggered a restructuring. By then the damage was structural. The licensees who did open were first-time retailers with no operational playbook, buying from a cultivator base that had been authorized to grow a year before anyone could sell, facing a wholesale glut, thin margins and an illicit competitor on every corner. Many of them were exactly who the law intended to help, and the state handed them a license and almost nothing else.

The gap that was always obvious

Here is the uncomfortable truth about social equity licensing as New York designed it. A license is not a business. The MRTA gave justice-impacted applicants priority access to a retail permit and then expected them to compete against the most sophisticated retail operators in the country, in the most expensive real estate market in the country, with a regulator that couldn’t process applications and a capital program that didn’t fund. The policy treated the MSOs as the problem to be contained rather than as the operating expertise the new entrants most needed.

Other states learned this. Illinois paired its social equity licenses with the LEAP program and mandated that existing operators fund training and incubation. Massachusetts built a Social Equity Program with technical assistance tracks. New Jersey required MSOs to support micro-licensees as a condition of adult-use conversion. None of those programs were perfect, but all of them recognized that the fastest way to build a competent independent operator is to put them next to someone who already runs one.

New York did the opposite. It built a wall between the medical MSOs and the equity licensees, then waited to see which side would cross it. Curaleaf just did.

Why this version works

The incubator is not charity, and it shouldn’t be read that way. Curaleaf operates in New York as a registered organization and sells wholesale into the independent retail channel. Thirteen better-run dispensaries are thirteen better wholesale accounts, with cleaner compliance, smarter assortment and the accounting discipline to actually pay invoices. Jordan’s “requires action” framing is enlightened self-interest, which is the only kind that scales.

That’s exactly why it works. A mandated equity program run by a regulator produces a compliance exercise. A program run by an operator whose own revenue depends on the graduates succeeding produces a curriculum that covers OCM reporting, 280E accounting and promotional pricing, which is to say the things that actually kill small dispensaries. The open-discussion format matters too, because it puts a first-year CAURD licensee in a room with Terp Bros, one of the few independents that has figured out how to thrive, and lets them compare notes without a state official moderating.

What should happen next

Curaleaf says it is exploring expansion to other markets and will open New York’s second cohort in December. The state should get ahead of it. OCM could make incubation credit a condition of any future MSO license expansion in New York, the way New Jersey did. It could fund stipends so independent operators can afford the time away from the counter. It could, at minimum, publicize the program to the hundreds of licensees still trying to open.

The deeper lesson is for every state writing an equity framework now, including Virginia, Minnesota and whatever Pennsylvania eventually produces. Reserve the licenses, yes. But build the mentorship into the statute from the start, require the seasoned operators to show up, and measure the program by how many equity stores are profitable at year three, not how many licenses were issued at year one. New York spent three years proving the alternative doesn’t work. Curaleaf spent six months proving the fix is not complicated.

📈 Dog Walkers

$AVCN Raises Strategic Capital

Avicanna closed a non-brokered private placement this week that tells you more about the state of Canadian small-cap cannabis financing than about the company itself. The Toronto-based biopharma raised $2.0 million through 2,000 non-convertible debenture units at $1,000 apiece, and the terms are a clean read on what a sub-$0.20 stock has to pay to borrow.

The debentures carry 13% annual interest, paid monthly, and mature in one year. They’re unsecured at closing, but the company has committed to a general security agreement within 30 days, which means lenders will soon sit senior to equity on substantially all assets. Avicanna can repay early from month six onward, and each subscriber collects a 2% administrative fee on top, so the all-in cost of this money is closer to 15% before counting the warrants.

And the warrants are the real price. Each unit comes with 2,000 warrants exercisable at $0.20 for three years, or 4 million warrants in total. If the stock gets above that strike, lenders who were paid 13% to wait get another $800,000 of equity upside, and existing shareholders absorb the dilution. The hold period expires March 1, 2027. No insider participation was disclosed.

Use of proceeds is the standard list: working capital, G&A, production and manufacturing, research and clinical development. CEO Aras Azadian said the financing “provides additional working capital and financial flexibility to support our continued growth,” and pointed to RHO Phyto expanding into new international markets and the Santa Marta Golden Hemp subsidiary supplying active pharmaceutical ingredients to partners abroad.

Avicanna has a defensible story: pharmaceutical-grade cannabinoid formulations, a Colombian cultivation base, regulatory-grade products in Canada and export channels in Europe and Latin America. What it doesn’t have is cheap access to capital, and a one-year 13% note with full warrant coverage says the equity markets aren’t open to it at any price it’s willing to accept. The money buys twelve months. The clock starts now.

📺 Trade To Black

DEA Registers 900+ Dispensaries, but Not Every License Qualifies | TTB Weekly Recap

• DEA grants federal registrations to 900+ medical dispensaries across Alabama, Florida, Mississippi, South Dakota, Texas, Virginia and West Virginia, and discloses 6,983 total applications. Minnesota was denied because its dual-use license doesn’t fit the April medical order, Pennsylvania’s 227 applicants weren’t in the first wave, and broader rescheduling still sits with Judge Julius.

• Jushi grows revenue 7% to $70.5M on record wholesale, and Verano posts $212M in revenue with $49M in operating cash flow, narrowing its net loss to about $4M as tax expense drops.

• SNDL delivers record free cash flow of ~C$20M but takes a C$52M impairment on cannabis operations, while Tilray shrinks its brewery footprint, reaffirms $68–75M fiscal 2027 adjusted EBITDA, and preps for the January 1 Carlsberg partnership.

• Kentucky reaches all 11 licensing regions as Cresco Labs opens Sunnyside Prestonsburg, with the state’s approved patient count now past 28,000.