Colorado has become the latest state to launch a loan program aimed at promoting social equity within its cannabis industry. The state’s Office of Economic Development and International Trade (OEDIT) recently announced the allocation of $4 million to fund the program. The loan program will offer support to cannabis social equity businesses that meet specific criteria, aiming to address historic and current inequities in the industry by providing capital and technical assistance to businesses owned by people of color, women, and those disproportionately impacted by the War on Drugs.
Colorado’s cannabis industry is one of the largest in the country, generating significant revenue for the state. However, the industry has been marked by a lack of diversity and inclusion. According to a 2019 report by the state’s Marijuana Enforcement Division, only 8% of licensed cannabis businesses in Colorado were owned by individuals from communities disproportionately affected by the War on Drugs. By contrast, nearly 70% of the industry was owned by white individuals.
The lack of diversity within the cannabis industry is a problem that has been acknowledged by industry advocates, policymakers, and regulators alike. In recent years, states with legal cannabis markets have increasingly sought to address this issue through a variety of measures, including social equity programs, expungement of criminal records, and the allocation of funding to support minority-owned businesses.
Colorado’s loan program is a significant step towards promoting social equity within the state’s cannabis industry. To be eligible for the program, businesses must be majority-owned by Colorado residents who meet certain income requirements and must be licensed by the state’s Marijuana Enforcement Division. Additionally, businesses must have a social equity license, or must be eligible for one. Social equity licenses are available to businesses that are owned by individuals from communities that have been disproportionately affected by the War on Drugs, or to businesses that employ individuals from these communities.
The loan program will provide low-interest loans of up to $500,000 per borrower, which can be used for a variety of purposes, including working capital, equipment purchases, and real estate acquisition. The loans will be offered with a repayment period of up to ten years.
The announcement of the loan program has been met with enthusiasm by advocates for social equity in the cannabis industry. “This is an important step forward in our ongoing efforts to create a more diverse and inclusive cannabis industry,” said Rachel Gillette, a cannabis attorney and member of Colorado’s Cannabis Equity Workgroup. “Access to capital is critical for these businesses to succeed, and this loan program will help level the playing field.”
Colorado’s loan program is just one of many efforts underway to promote social equity within the cannabis industry. In California, the state’s Bureau of Cannabis Control recently announced plans to award $15 million in grant funding to support social equity programs throughout the state. The funding will be used to provide technical assistance and training to social equity applicants, as well as to support outreach and education efforts.
Similarly, in Illinois, the state’s cannabis legalization law includes provisions for social equity applicants, including reduced licensing fees, access to capital, and assistance with business plans. The state has also established a $31.5 million loan program aimed at supporting social equity applicants.
Overall, the launch of Colorado’s loan program represents a significant investment in promoting social equity within the state’s cannabis industry. By providing funding and technical assistance to businesses owned by individuals from communities that have been disproportionately impacted by the War on Drugs, the program has the potential to create new opportunities and reduce existing disparities within the industry. As more states move towards legalization, it is essential that they prioritize social equity and take steps to ensure that their cannabis industries are inclusive and diverse.
