$200M cannabis fund info about Chris Webber, Siebert Williams comes to light

It took the state exactly 100 days to release information on the players managing New York’s $200 million cannabis social equity fund, but it’s now public and the details are, in parts, expected, confusing, surprising – and untrue.

As a refresher, NY Cannabis Insider requested documents from the Dormitory Authority of the State of New York (DASNY) in September that would show how the agency ended up selecting Social Equity Impact Ventures to raise and manage money that is essential to the state’s promise of equity in its future cannabis marketplace.

Sign up for the NY Cannabis Insider newsletter

The records request followed confusion, rumors, and worries among cannabis entrepreneurs that Impact Ventures was not thoroughly vetted or qualified for the job. That’s because the team – composed of NBA Hall of Famer Chris Webber, entrepreneur Lavetta Willis, and executives with financial firm Siebert Williams Shank – has not yet raised the $150 million from private investors that is necessary to secure and retrofit up to 150 dispensaries as part of the state’s Conditional Adult-Use Retail Dispensary (CAURD) program.

DASNY delayed producing those records for more than three months, and did so only after NY Cannabis Insider published stories about the agency’s non-responsiveness every day for weeks, and after enlisting the NY Committee on Open Government to step in.

The documents include a partially redacted version of Impact Ventures’ response to DASNY’s request for proposals submitted in June. The response spans 86 pages and includes new details on the team, its qualifications, and – notably – its concerns over raising the $150 million within the state’s proposed timeline.

The documents also confirm that Impact Ventures did submit information to the state that was not true or, at best, was a stretch.

NY Cannabis Insider contacted a spokesperson for Impact Ventures weeks ago. The spokesperson initially agreed to answer questions – but then stopped responding.

The role of Siebert Williams Shank

In June, Gov. Kathy Hochul announced Impact Ventures as the state’s top pick to manage the New York Social Equity Cannabis Investment Fund, and the headlines at the time all keyed in on the same thing – that Chris Webber, a famous athlete, was spearheading the fund management team alongside his business partner, Lavetta Willis.

However, the DASNY records show that Siebert Williams Shank, a minority- and women-owned investment banking firm, is the majority shareholder of Impact Ventures – at 60% – while the Webber and Willis team own the remaining 40%.

Headquartered in New York and Oakland, Siebert Williams is a large firm with 19 offices across the country. Suzanne Shank is its CEO and the first person mentioned in the DASNY documents under a section called “The Team.”

Shank is a 35-year veteran of the financial services industry and “one of the most successful African-American women on Wall Street,” according to a 2016 profile. She is a major figure in Detroit whose firm has led large municipal projects, including an $800-million deal with the NYC Transitional Finance Authority.

William Thompson, Jr., is the second name mentioned. Thompson is the chief administrative officer of Siebert Williams and a former NYC Comptroller from 2002 to 2009, during which time he “managed a $66 million annual operating budget” and “safeguarded a $100 billion portfolio,” according to the report.

Though Siebert Williams has an established reputation raising capital, it’s not apparent – either in the DASNY report or through online research – that the firm has any experience in the cannabis sector. The report highlights Siebert’s past work creating a “private equity-style investment vehicle” – or “impact fund” – to provide financing to minority-owned businesses, but doesn’t mention any funds relevant to cannabis.

For that, the Impact Ventures proposal highlights the past work of Webber and Willis.

The role of Chris Webber and Lavetta Willis

From the report:

“Enhancing the Siebert Team’s impact fund experience is the Webber team’s recent launch of the WebberWild Fund, a private equity cannabis impact fund that seeks to lift up diverse leadership teams within the cannabis industry.”

The Webber Wild Fund was announced in February of 2021 and is led by Webber, Willis and Jason Wild, the president and chief investment officer of JW Asset Management and the chairman of TerrAscend, a multistate operator. Around the time of the announcement, a spokesperson told MJBiz that the fund’s target is $100 million and a “large portion” has been committed.

Less than a year later, in an article titled “22 Cannabis Leaders Who Will Shape the Industry in 2022,” the fund was described as ready to deploy, and it was said that it “already has a full pipeline.”

But the DASNY report says the fund has “just under $20 million committed to-date” in one section, and “over $20 million committed to-date” in another section. Either way, the total is around 20% of the overall goal after nearly a year-and-a-half in operation.

Additionally, the Impact Ventures proposal says that the fund seeks to uplift diverse leadership teams within the cannabis industry and “accomplishes this mission by investing in entrepreneurs of color and providing them with badly needed capital and a vast network of resources.”

Beyond direct investments, the DASNY report says, “the Webber Team has also creatively brokered alternate funding resources for social equity operators that create real value without adversely impacting their balance sheets. Examples of these resources include shelf space agreements with strategic suppliers and obtaining favorable term agreements with equipment manufacturers.”

However.

NY Cannabis Insider contacted dozens of cannabis entrepreneurs of color across the country and couldn’t find a single person who has ever received money from the Webber Wild Fund or received their help brokering “alternate funding resources.”

Those who were in talks with the pair all shared similar experiences: they were introduced to Webber and Willis, spent time – sometimes months – in talks, only to see the two eventually disappear from the conversation.

“There was at least a period of six months where my time was actively wasted,”said Lanese Martin, executive director of The Hood Incubator, a national political action organization centered around cannabis justice that was actively engaged in funding conversations with Webber and Willis last year.

LOWD and Minority Cannabis Business Association co-founder Jesce Horton shared a similar story with NY Cannabis Insider.

“They started telling me about the funding they were doing, and I thought they expressed a sincere desire to fund, but after that – I stopped hearing from them,” Horton said.

The role of Cookies

NY Cannabis Insider’s original investigation into this topic in November found Webber and Willis have deep financial ties to the major global cannabis brand Cookies, which could pose a conflict of interest in their New York role.

The pair announced a partnership with Cookies U on a $50 million cannabis training facility in Detroit, and a deal in which Cookies dispensaries in Michigan will carry the pair’s Players Only branded weed.

A Columbia University Law School professor, Richard Briffault, told NY Cannabis Insider that the arrangement “is an issue,” adding that he couldn’t say whether the business relationship is legally prohibited, but that it’s “a problem,” nonetheless.

Neither Impact Ventures nor Cookies would grant interview requests, but DASNY did provide a statement for that story that said the agency required Impact Ventures to certify that they will adhere to state ethics and conflict requirements.

“The selected fund manager team has provided the requisite certifications and has confirmed that the team is not engaged in business activities within the state of New York that would pose a conflict with the requirements of the state’s Cannabis program,” said DASNY spokesperson Jeffrey Gordon.

However.

The DASNY records show another layer to the Cookies/Impact Ventures saga.

Joslyn Hearne is listed after Webber and Willis in the “team” section of the report. She’s described as having “20 years of retail and customer service experience” and, more specifically in the cannabis industry, as someone who “has had the pleasure of working for the most globally recognized cannabis company in the world.”

She “opened and operated more than 30 retail locations in multiple states across the US as well as internationally …. In less than 3 years Ms. Hearne and her team were able to solidify the company as the #1 cannabis brand in the world.”

Though the DASNY proposal doesn’t list this company’s name throughout her bio, it is available on Hearne’s LinkedIn page.

It’s Cookies.

“Respondent is aware of no potential conflicts of interest,” the Impact Ventures team certified in the report.

Detroit

Under a section titled “Extensive Experience in Cannabis Industry,” the report says that senior members of the Webber team are “in the process of transforming a nine-acre industrial site in Detroit into a flagship Players Only 8,000 square ft dispensary, consumption lounge, 40,000 ft cultivation and R&D facility with a cannabis job training program.”

This is a reference to the announcement Webber, Willis, and Wild made in September of 2021 about launching a $50 million cannabis operations and training facility called Players Only Holdings in downtown Detroit – a project Webber said “will be the shining jewel of Michigan.”

The development marked the “first major announcement from Webber and Willis” since forming the Webber Wild fund earlier that year, according to MJBizDaily.

However.

The project has yet to materialize and NY Cannabis Insider was unable to find any evidence that it’s still being pursued. A photographer was sent on Nov. 30, 2022, to scope out the complex in downtown Detroit and take photos.

No buildings were renovated, warehouses were as vacant as they were when the announcement was made in 2021, and spokespeople from the city of Detroit were unable to provide any information about the massive development, other than saying that they were “aware of the pending project, but not certain of their intentions with it.”

A warning about raising the funds

Upon hiring Impact Ventures, DASNY had a set expectation that the fund manager would raise the $150 million by Sept. 1, 2022.

In tandem, the Office of Cannabis Management began accepting applications for CAURD licenses in late August, and closed the application period on Sept. 26. With an expected $200 million to draw from (the $150 million from private investors and the $50 million from New York State), this timeline would allow for the CAURD program to get started as soon as applications were reviewed and licenses awarded.

That didn’t happen.

With the money apparently far from being raised, OCM had to shift gears last month and allow CAURD licensees to find their own locations instead of relying on DASNY to find and retrofit turnkey dispensaries. This has created confusion, frustration and anger among many CAURD licensees, who paid a $2,000 application fee on the promise that – if they were to receive a license – they wouldn’t have to deal with real estate.

Regarding the fundraising, the Impact Ventures team said in its June proposal that it is “well aware of the headwinds in both the private markets generally and the cannabis market specifically,” but that “we believe we are fully capable of raising all requisite capital.”

“This belief is evidenced by the Siebert and Webber teams’ prior experience successfully securing capital commitments for prior funds,” the team said.

However.

“Impact Ventures does, however, believe that a September 1, 2022 target date for completion of capital commitments is aggressive and will be significantly informed by volatility in the market and economic outlook.”

In short, DASNY was warned in June that its September deadline to raise the funds was unlikely.