New York State is about to dip its toe into the wonderful world of marijuana, and it appears that some local businesses are intrigued by the margins on Mary Jane.
Andrew Cuomo's den of vice, often referred to as "Albany," will soon announce who it has selected as the first five recipients of state licenses to legally sell medical marijuana in New York. It's a big day full of opportunity for a lot of small businessmen who want to get rich by getting people therapeutically high, but according to Crain's New York, it's also a medium-sized day for one not-so-small business that also likes the idea of selling a little weed on the side.
Ari Hoffnung, a 2005 Bronx City Council candidate whose Fiorello Pharmaceuticals was named after legendary New York City Mayor Fiorello La Guardia, asserted that his company's partnership with CastleOak Securities, a subsidiary of major Wall Street firm Cantor Fitzgerald, places his bid head-and-shoulders above the rest. He said he is the only applicant to publicly announce a partnership with a leading investment bank.
Hoffnung, who spent a past life as a managing director at Bear Stearns, is no stoner finance neophyte and his deal with Cantor is hardly akin to Goldman Sachs partnering up with your cousin's head shop, but the idea that a big Wall Street firm would creep this close to direct marijuana investment does signal that the tide is really turning. Especially when you look at the numbers;
CastleOak helped Mr. Hoffnung's Fiorello Pharmaceuticals raise $7.5 million in Series A financing, an amount he hopes to double if awarded a state license. Marijuana investors estimate startup costs for companies in New York to be a minimum of $25 million. (A spokeswoman for the bank did not immediately return a request for comment.)
That's a lot of dime bags.