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Colorado Launches Cannabis Social Equity Grant Program

Colorado Gov. Last week, Colorado Governor Jared Polis announced that a grant program was being launched for state-licensed cannabis social equity businesses. This will provide them with capital and a source of funding. The governor’s office said in a statement that the new grant program is “a bold, forward-thinking initiative to save small businesses money, foster a more equitable cannabis industry, and make it easier for Coloradans to thrive in one of the state’s fastest growing industries.”

These grants were created by the Colorado Office of Economic Development and International Trade, OEDIT (Office of Economic Development and International Trade) and its Cannabis Business Office. This program provides financial assistance to cannabis social equity licensed companies in order to help them grow their businesses.

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

Colorado Social Equity: What’s the Catch?

When Colorado legalized recreational pot in 2012, the state’s groundbreaking cannabis reform legislation failed to adequately address decades of racial disparities in the enforcement of cannabis prohibition. As other states prepare plans to legalize cannabis and remove the criminal penalties that cannabis users face, social equity has been a major issue.

Colorado is now taking measures to institute social equity provisions into the state’s cannabis regulations. The state also passed legislation in 2020 to forgive those who have been convicted of cannabis offenses. Polis also signed legislation to create the Cannabis Business Office in March to offer financial and technical assistance to individuals who are disproportionately affected by the War on Drugs. In July, the agency was opened. It began offering services to applicants for social equity.

“The Cannabis Business Office will provide novel and ambitious programming to provide more equitable opportunity in the cannabis industry,” program manager Tristan Watkins said when the Cannabis Business Office opened last summer. “As the office expands, we are confident it will further solidify Colorado as the leader in the nation’s cannabis industry.”

The state of 2021 found that even after legalization, blacks and Latinos still were being arrested in Colorado for cannabis-related offences at an increased rate than whites. African Americans were twice as likely to be charged. Entrepreneurs of color are also underrepresented in the state’s cannabis industry and face unique challenges in raising capital to fund the costs of launching and growing a business.

“Finding funding opportunities is an ongoing challenge that cannabis entrepreneurs face in the US,” Watkins said in last week’s announcement. “The Pilot Grant is designed for early-stage and growing businesses to gain access to the capital they need to succeed — whether it’s for seed money to get started, or to help cover costs to improve their business.”

Grant Applications Now Open

Eligible social equity business owners who have obtained or are applying for a Colorado Marijuana Enforcement Division license for cannabis were able to apply for grants in the first round. Social equity applicants who are qualified include people who live in state-recognized opportunities zones for at least fifteen years, those with past convictions for marijuana-related offenses and households earning less than 50% of the state’s median income.

To be eligible for a grant, businesses are required to complete the state’s Cannabis Business Technical Assistance Program or a partner program, which teaches the fundamentals of opening a business in the regulated cannabis industry. Following this, companies will complete both the pre-application as well as the application process. The detailed proposal must be developed to explain the use for grant funding. After approval, the applications are subject to reviewer evaluations. The selected companies will then be notified and receive funding.

The business maturity of applicants will determine which group the applicant is placed in. The foundational grant category is eligible for up to $25,000 and the growth category up to $50,000. Grant funds can be awarded for completed or upcoming projects including “brick and mortar regulatory requirements, technical and expert requirements, licensing and regulatory fees, operation needs and innovative initiatives.”

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