Problem with Notes on Catalina OS

I just upgraded to a new imac and am trying to use the Notes application. I cannot seem to create a new note. When I open the application everything is greyed out except "New Folder" and when I click on it nothing happens. I cannot write a note because the icon with the pencil is also greyed out. Am I missing something obvious? I use note apps on my ipad and iphone just fine. Thanks

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