Brooklyn Dispensary Owner and Nonprofit Clash Over $2.5 Million Cannabis Deal

Leeann Mata, Brooklyn’s first Black woman cannabis licensee, accuses Housing Works of undermining her business

BROOKLYN, N.Y. — In the ever-evolving world of legal cannabis, deals can make or break fledgling businesses. Leeann Mata knows this firsthand. Two years after making history as the first Black woman to open a licensed cannabis dispensary in Brooklyn, Mata finds herself in a high-stakes legal battle with Housing Works, the nonprofit that helped launch her store, Matawana.

The dispute highlights the fragile and complex arrangements that have emerged in New York’s fledgling legal cannabis market. Housing Works, which operates its own successful dispensary and assists individuals affected by the war on drugs, is suing Mata for $2.5 million in unpaid fees. Mata, in turn, filed a complaint with state regulators alleging that the nonprofit exploited her.

At the heart of the disagreement is delivery. Mata said she discovered in April 2024 that a Housing Works delivery driver was operating in her store’s territory, despite consultants telling her that Matawana was not yet ready for deliveries. “Everything they were doing was destroying my company,” Mata said.

Matthew Bernardo, president of Housing Works, disputed the claim, noting that the nonprofit had delivered in the area before partnering with Mata. He said Matawana lacked the software and staff training needed for delivery, and that the nonprofit’s lawsuit came only after attempts at settlement failed. “There’s always disagreements,” Bernardo said. “Ultimately, both parties have to abide by their contract.”

The deal that launched Matawana involved investors providing $700,000 for a 19 percent stake, with Housing Works handling lease guarantees, payroll, and staffing. In return, Matawana agreed to pay $20,000 per month and 5 percent of revenue to the nonprofit under a three-year agreement. Yet, Mata said errors by Housing Works consultants led to payroll mistakes and late tax filings, eroding her trust.

Industry observers say such conflicts are common in the young, high-risk cannabis market, where federal illegality limits financing and expertise. “Unequipped license holders rush into deals that ultimately hurt them,” said Yvette McDowell, a cannabis lawyer who has worked on similar disputes in California. Lawyers warn that intertwined contracts can make it difficult for licensees to maintain control or exit arrangements that don’t work.

While Matawana is the only Housing Works-affiliated dispensary to sever ties under contentious circumstances, others have benefited from the partnership. Stores supported by the nonprofit rank among New York’s highest-grossing cannabis businesses, according to market research firm Lit Alerts.

For Mata, the stakes are personal. The summer of 2023, after her mother’s death, brought an invitation from Housing Works that seemed like an opportunity to honor her family’s struggles with the war on drugs and opioid addiction. What started as a promising collaboration has devolved into a legal and public battle that underscores the challenges Black and minority entrepreneurs face in a heavily regulated, nascent industry.

“You don’t think they would take advantage of you,” Mata said. “But you quickly learn the system is stacked against small operators, even with nonprofits that claim to help.”