The Colorado Legislature's Joint Budget Committee has approved $4 million to create a state fund that would provide grants, low-interest loans and technical assistance to marijuana entrepreneurs from communities impacted by the War on the Drugs, but there are still some political hoops to jump through.
Proposed by the Office of Governor Jared Polis and the Colorado Office of Economic Development and International Trade, the Cannabis Advancement Program (CAP) would be funded by state marijuana tax revenue, with around $3 million set aside for low-interest loans available only to entrepreneurs who qualify under a new social equity definition for the marijuana industry.
The social equity definition was created by a bill that passed the legislature in 2020 but didn't include any funding mechanism. Because of that, the governor's office and OEDIT still need to get CAP attached to an omnibus or long bill in order for the program to come to fruition, requiring further approval from lawmakers. However, both social equity advocates and Polis staffers are confident that the plan will be approved.
"We’re delighted to know that JBC approved $4 million for the creation of the Cannabis Advancement Program pending approved legislation," says Polis spokesman Conor Cahill. "We look forward to working with the legislature to achieve our mutual goal of repairing the disenfranchisement of those who were harmed by the failed War on Drugs."
Citing the ongoing legislative process, OEDIT declined to comment on any future social equity funding, but a recent copy of the CAP proposal shows that suggested loan amounts range from $50,000 to $100,000. On top of the loan pool, a little under $1 million is proposed for grants to social equity businesses and support organizations that are "seeking to innovate and expand" the marijuana industry while creating new jobs, according to OEDIT, with several hundred thousand dollars allocated to supporting the new business owners by providing help with business plans, operational consultations and other services.
The suggested funding for CAP has fluctuated heavily since Polis's first budget proposals were released in 2020, with his initial concept — using $150,000 to hire a new OEDIT employee tasked with evaluating the need for marijuana social equity in Colorado — quickly criticized by industry stakeholders as being too little and too slow. That figure then bounded up to $5 million, and the JBC eventually settled on $4 million, pro-rating a brief plan from Polis and OEDIT.
"You can never make everyone happy. It's a good amount, and it's a good start," says Sarah Woodson, a marijuana hospitality business owner and social equity advocate. "If we need to go back and ask for more because so many social equity people are coming out of the woodwork, then we will."
To qualify under this definition, applicants must prove one of following: They or their families were negatively impacted by the War on Drugs, they earn less than 50 percent of the state median income, or they come from a community designated as a low-economic opportunity zone by OEDIT. Woodson knows ten budding entrepreneurs who have applied or are in the process of applying for social equity designation, she says.
New potrepreneurs usually need help with legal and application fees when trying to obtain state and local business licensing, according to Woodson, as well as startup funding and early operational planning. "For the majority of new business owners, it's understanding the application process, zoning, consulting services and those sorts of areas," she explains.
If approved, the loans and funding would likely be sent to local governments that have approved social equity marijuana licensing and special business districts around the state, or directly to social equity businesses and organizations, though such details could change during legislative discussion.
So far, Aurora is the only Colorado city to officially approve marijuana social equity language; Denver City Council is expected to vote on the issue in the next month or two, according to the Denver Department of Excise and Licenses.
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