Colorado launches cannabis social equity grant program

Colorado Gov. Jared Polis last week announced the launch of a state grant program for cannabis social equity companies, offering licensed operators a new source of capital for their businesses. The Office of the Governor said in a statement that the new grant program is “a bold, forward-thinking initiative to save small businesses money, promote a more equitable cannabis industry, and make things easier for Colorado residents in one of the state’s fastest-growing industries.” to be succesfull .”

The new grants are an initiative of the Colorado Office of Economic Development and International Trade (OEDIT) and its Cannabis Business Office. The program is designed to provide financial support to licensed cannabis social equity companies to accelerate the growth of their businesses.

“Colorado’s state-leading innovations in the cannabis industry are strengthening our economy, promoting diversity and inclusion, and saving money for small business owners,” Polis said in a statement from the governor’s office last week.

Catching up on social justice in Colorado

When Colorado legalized recreational cannabis in 2012, the state’s groundbreaking cannabis reform legislation failed to adequately address decades of racial differences in cannabis prohibition enforcement. Since then, social justice has become a key issue as other states draft plans to eliminate criminal sanctions for cannabis use and legalize a regulated cannabis economy.

Colorado is now taking action to add social justice provisions to state cannabis regulations. In 2020, the state passed legislation pardoning those with prior cannabis convictions. And last March, Polis signed legislation creating the Cannabis Business Office to provide financial and technical support to businesses owned by people disproportionately affected by the war on drugs. The agency opened in July and began providing services to social justice claimants.

“The Cannabis Business Office will offer a novel and ambitious program to create more equal opportunity in the cannabis industry,” said program manager Tristan Watkins when the Cannabis Business Office opened last summer. “We are confident that the office expansion will further solidify Colorado as a leader in the nationwide cannabis industry.”

A 2021 state report found that after a decade of cannabis legalization in Colorado, blacks and Latinos were still arrested for cannabis offenses at higher rates than whites, with African Americans being charged twice as often. Entrepreneurs of color are also underrepresented in the state’s cannabis industry and face unique challenges in raising capital to fund the costs of starting and growing a business.

“Finding funding is an ongoing challenge facing cannabis entrepreneurs in the United States,” Watkins said in last week’s announcement. “The Pilot Grant is designed for young and growing companies to gain access to the capital they need to be successful – whether it’s seed capital to get them started or to cover the costs of improving their business.”

Grant applications now open

The application period for the first round of grants began Friday for eligible social justice businesses that have received or are seeking a cannabis license from the Colorado Marijuana Enforcement Division. Qualified Social Justice applicants include those who have lived in a state-recognized zone of opportunity for at least 15 years, those with prior weed-related convictions, and those in households earning less than half of the median income for the state.

To be eligible for a grant, companies must complete the state’s Cannabis Business Technical Assistance Program or an affiliate program that teaches the basics of opening a business in the regulated cannabis industry. Companies will then complete the pre-application and application processes, which include the development of a detailed proposal to outline the intended use of the grant funds. Approved applications then undergo peer review, with selected companies receiving notification and funding shortly thereafter.

Applicants are divided into two groups based on their business maturity. Companies in the founding category are eligible for grants of up to $25,000, while companies in the growth category can receive up to $50,000. Grant funds may be awarded for completed or upcoming projects, including “regulatory requirements, technical and professional requirements, licensing and regulatory fees, operational requirements, and innovative initiatives.”

More information about Colorado’s Cannabis Business Pilot Grant program for social equity companies is available online.