Denver's New Marijuana Business Incubator Program Has Big Plans

Denver is creating a new social equity incubation program for marijuana entrepreneurs, and the program's director has big plans.

"We get to do everything now at such a higher level, especially with the funding," says Sarah Woodson, who wastes no energy trying to hide her excitement.

Woodson is the founder of the Color of Cannabis, which was just selected by Denver Economic Development and Opportunity (DEDO) to lead the city's new entrepreneurial assistance program for social equity marijuana business owners. Created to assist aspiring business owners from communities impacted by the drug war, the Color of Cannabis has been holding ten-week courses for potrepreneurs for about two years, but now Woodson has $500,000 in city funds backing her play.

Denver City Council approved the program in 2021, appropriating the funding from the city's local marijuana tax revenue.

The plan is to help new business owners gain experience while receiving professional help to push their ideas forward. "We now have legal representation for our cohorts, and we can help with more application processes and provide more technical assistance," Woodson says. "We're going to create a small fund for new licensees. We're also going to be helping with business plans, pro formas and financials, which we weren't doing before. Before, it was just me. Now I have a full staff."

Over the past several years, the City of Denver has implemented a handful of initiatives to reserve marijuana business licenses for social equity entrepreneurs. However, securing funding and navigating the compliance labyrinth of legal pot has proved difficult for established marijuana business owners, let alone new ones.

"The biggest obstacles for social equity cannabis businesses are industry knowledge, business training, and access to capital to fund the start of their business. Due to federal regulations, marijuana businesses often cannot obtain a traditional bank loan for startup costs, and owners of marijuana businesses cannot deduct their business expenses on their taxes as a typical entrepreneur can. Access to the industry is thus limited to individuals who have capital to invest or alternative resources for startup funds, and substantial industry-specific technical knowledge is critical to business success," DEDO notes in a statement explaining the new program.

The course curriculum will cover industry compliance, cultivation and extraction, tax codes, business licensing, delivery, hospitality and several other aspects of running a marijuana business, with  attorneys, dispensary owners, growers and investors all popping in to speak on various topics.

According to DEDO, each ten-week course will assist around twenty business owners, with a goal of helping 100 people by June 2023. To be eligible, program applicants must qualify under one of three of the city's social equity designations: They or a family member were arrested on certain drug charges, their household earns less than 50 percent of the state median income, or they come from a community designated as a low-economic opportunity zone by the Colorado Office of Economic Development and International Trade.

Woodson recently criticized the state and city's social equity qualifications for being too easy for bigger, wealthier business owners to infiltrate.

"There are still problems there, but that change comes from a new social equity definition, and we're going to eventually get those tightened. Right now we're working on that on a state level," she says. "City-wise, there's still going to be some time before things are changed with real estate availability and [marijuana business] proximity setbacks. What we're looking forward to is a new city council."

And Woodson's end goal for the program goes much further than just classes: She wants to create a marijuana production facility in Denver where her students can begin their business journeys, a space where multiple marijuana extractors, edibles makers and infused-product manufacturers could operate.

"We're so excited about it all, but that's what I really want out of it," she says, acknowledging that there's still work to do before the city is persuaded to sign.

For now, Woodson says she's thrilled to partner with the city on the new program, and she's setting a high bar: "We're going to have some real success stories here. I'm very excited about it."

Applications are open through July 15, according to DEDO, but the program will be accepting another round after the first ten-week course concludes. Extra information such as business plans, industry experience and anything else that shows applicants "are ready to go and just need an extra push" could help their case, Woodson notes.

Denver's new program is separate from the state's Cannabis Business Office, a new division of the Office of Economic Development and International Trade created to provide similar assistance and curriculum to social equity marijuana business owners.