New Syndx wants to use its expertise assisting companies elsewhere to help Social Equity cannabis license applicants in New Jersey.
They are a unique consulting firm since they specifically look for micro-business applicants to be clients. While devoid of the financial assets and connections large cannabis companies have, micro-businesses are favored in the interim NJ Cannabis Regulatory Commission regulations.
New Syndx Legal and Business Advisor Derek Soltis said they are looking to help Social Equity license applicants along with women, disabled veterans, and minority-owned businesses. Social Equity cannabis license applicants are also favored in the regulations. Establishing Social Equity businesses in the industry remains an issue. They are defined in the regulations as those based in Economically Disadvantaged Areas or have a previous cannabis crime record, regardless of whether it was expunged. Diversely owned businesses are also heavily favored in the regulations.
Soltis said they are especially interested in helping secure conditional licenses, which present the most opportunities for humble start-ups. Soltis said they also want to work with people in the underground, legacy cannabis market who want to transition into the licensed industry.
“The licensing process has always been a Catch-22. You need financing to get a license, but you can’t get a license unless you have your financing. And nobody wants to finance people until they have a license,” he said.
The application process for those interested in cultivation and manufacturing licenses, along with testing labs, opened on December 15th. On March 15th, those who want a dispensary can apply. The wholesale, distribution and delivery licenses will be opened for application later.
Checking Off Boxes
Soltis noted many Social Equity license applicants are first-time entrepreneurs unfamiliar with fulfilling all the requirements to launch a business.
“Odds are you’ve never written a Business Plan in your life,” he said
A good Business Plan is a key component of a successful cannabis license application. While a lot of it can be intuitive, projecting future revenue is not.
There is a great demand for cannabis consultants to assist companies applying for a coveted adult-use cannabis business license. Most of the adult-use markets involve a complicated and often costly application to operate in the cannabis market.
He noted they have in-house experts with experience securing licenses for Social Equity cannabis license applicants elsewhere. They have previously worked with Michigan, California, and upstate New York companies. Soltis noted they could use parts of successful submissions that would not change greatly, like a security plan.
In addition, he said they can also provide introductions to technical consultants that can help.
“We’ve done this kind of thing in the past,” he said.
New Syndx were exhibitors at the NECANN convention in Atlantic City in October.
Helping Social Equity Cannabis License Applicants Financially
More important than technical assistance, New Syndx also provides financial assistance. Soltis noted they could help their clients get good deals with banks and other institutions that often charge cannabis companies exorbitant interest rates.
“We have qualified investors that want to invest but don’t want to write a blank check until they see the plan and whether it makes sense,” Soltis said.
Soltis said they are mindful of the limited number of licenses allowed per town and would not take a client who wanted to apply for a slot when none was available.
He noted a lot of people are investing in the New Jersey cannabis market.
The President of New Syndx, Jason Bost, has helped several cannabis companies secure licenses in other cannabis markets. He got in trouble earlier in his career and had trouble getting a job. Bost subsequently worked in the music industry and has since built a network interested in investing in the legalized cannabis industry.
Mike Dominkowitz is specifically in charge of financing at New Syndx. He was a Wall Street professional for 35 years and trained many brokers. In the process, Dominkowitz developed a large network that comes in handy.
He said he grew up in the projects of Hell’s Kitchen in New York City and has been a consumer of cannabis for more than 50 years.
In addition, New Jersey-based attorney Lazaro Cardenas is advising the company on legal matters (full disclosure; we both serve on the board of the Latino Action Network).