The office is still gearing up before it doles out resources to qualified applicants, but OEDIT has already chosen the leader and program manager for the operation: Tristan Watkins. A Vanderbilt graduate with a Ph.D. in neuroscience, Watkins has experience in both the business and science worlds, having previously served as a brand consultant for Point Seven Group and chief science officer for marijuana extraction company Lucid Mood.
We caught up with Watkins to learn more about how he plans to lead the Cannabis Business Office, what the financial assistance will look like, and how Colorado will measure the success of the social equity program.
Westword: What made you interested in running this new business program after working on the science side of cannabis in the private sector?
Tristan Watkins: Seeing the bill get announced months back and then seeing the program actually become available for applications got me really excited. The ultimate goal of the Cannabis Business Office is totally in line with values that I have, as well. I've been wanting to dedicate a lot of my career time toward something that's very value-driven and gives back, so I thought it was a perfect opportunity to mesh my own background with something I'd like to see improved.
How are the timelines of Cannabis Business Office programs and loan allocations shaping up?
We've been working on that a lot lately. I will say that hard dates are a little in flux at the moment, and we're targeting mid-September to update our website and newsletter to provide more hard details. That being said, I think it's important to see this as a brand-new program and a brand-new office. We're building everything from scratch right now, and we want to make sure we hear the community and tailor the program in a way that actually helps the individuals that the program was created for. We want to be diligent, and don't want to rush and prop it up as soon as possible.
One way we're trying to speed this up is by looking at the technical-assistance aspect in three different stages to kind of identify needs across foundational, growth and increasing efficiency stages. By putting the technical assistance into these three different modules, it will allow us to focus on the stages one at a time, so that we don't need to get everything prepped before getting through the door. We are ready to launch the foundational stage of technical assistance right now. Through our initial data collection, it's become clear that a significant portion of business entities approaching this office are still in that phase, and we want to meet the most people where they are.
What areas of starting a cannabis business are most challenging for entrepreneurs who lack funding or technical experience, and how do you want to address them?
I feel we'll get to primary hurdles later on, but some of the core aspects we want to address are business basics. There are a lot of individuals who see the cannabis industry as a first step to owning their own business. Cannabis has its own challenges, but it's still a standard business that needs a really strong foundation in basics of accounting, taxes and human resources.
We want to focus on helping people learn how to raise capital later on down the round. We recognize that we'll be able to provide some startup capital, but at the end of the day, these businesses take a lot of money and resources to get up, let alone scale. We want to make sure those coming through our program can get back out down the road with a pitch deck and their financials and books in order, to understand what a data room is and how venture capitalists' and angel investors' minds work to maximize their chances at pulling in additional capital later on.
How much was OEDIT already prepared to assist cannabis business owners after the program was approved, and what areas of cannabis business does OEDIT need to learn more about as the program gets rolling?
One general hurdle right now is that the federal government doesn't primarily approve THC. There are a lot of federal resources that have gone into building these sorts of state programs that the Cannabis Business Office can't access due to that federal prohibition. It's one of the reasons you're seeing more of a deliberate building process, because we have to kind of rebuild backbone processes, like accessing and tracking consultants, that are a little more challenging when they involve cannabis.
Can you elaborate more on that? The program is run by the state, so where would federal policy come into play?
The federal Small Business Administration and Small Business Development Center Network do a great job at helping small businesses in Colorado by providing access to consultants and things like that, but because federal dollars flow through them, we can't rely on those well-built processes and functions that OEDIT and the SBDC have already created. That's what the state funding is for here, and that's what the Cannabis Business Office is operating under.
Have you learned anything from other states in terms of what to do or not do as you get this program up and running?
Speaking more generally on that without giving specifics on other efforts, I will say one thing we're doing that really stood out versus other states is the money aspect. Whether it's grants or loans we're offering, the cannabis industry is very capital-intensive. Just offering access to licenses themselves is a nice step, but if you don't have the capital, that doesn't help as much as it could. I love how Colorado has tied funding access to this.
Are you able to share how the grants and loans will be allocated?
We have $1 million allocated for grants and $2.5 million allocated for micro-loans. The dollar amounts attached to these will vary by company size and will be partially determined by proposals the applicants submit. We're planning a more simplified application process, and we want the funding to be tied to the proposal process. It's free practice to be thinking of that if you're a business owner. They'd be asked the same thing at a bank, but we won't want to add unnecessary hurdles, so any steps of effort placed on the businesses are supposed be productive for them, as well.
Are some cannabis businesses cheaper or easier to start than others?
I think that's dependent on what stage the client or businesses are in, and what their additional network is. Some licenses, like cultivation, take more money to get started, but I don't want to say our program wouldn't be beneficial for someone looking for a cultivation license. I will say we're expecting more on the delivery and hospitality sides, because they are newer aspects of the Colorado industry and a little less saturated.
What steps is the Cannabis Business Office taking to make sure that, after doling out these cannabis licenses, the business owners and the communities they come from retain the licenses down the road?
This is something we're still thinking through, and it's more of a technical component that more people than myself are deciding. I'm really leaning on a lot of prior expertise here. We're looking at past and similar grants and how those were doled out to see how a licensee matures. I'm not quite at the level of expertise to be speaking in detail on that right now, though.
What's the measure of success here? In ten years, how do you hope Colorado's cannabis landscape looks?
We're measuring success in multiple time frames. The bill itself allocates money for two years starting this past July, so that's one time frame. We're also looking at quantitative metrics: broad things like number of jobs created, revenue generated by businesses that went through the Cannabis Business Office in some capacity, the businesses we helped, and the capital that's been deployed. This isn't a ten-year timeline, but I think the goal is going to be a lack of need for these sort of equity programs, because equity would naturally be in existence. I'd love to see a much more diverse cannabis industry that's more reflective of the Colorado population.
When you look at Colorado's population, Denver is one of the state's more diverse cities, but it also has one of the most saturated local cannabis industries. How do you create more diversity in an industry when some of the smaller towns joining the pot trade don't reflect the state's overall population?
We want to look at the stats at a broader, statewide level. At the end of the day, Denver is responsible for a major aspect of the cannabis industry, but there is a much broader population demographic across Colorado. We are actively trying to push this message to local community leaders, as well. As has been seen in other efforts independent of cannabis, pushing a message broadly doesn't get all of the targets you're going for. We want to make sure this message doesn't just hit Denver, Aurora or people who read Westword or the Denver Post, but other communities who rely on tight-knit organizations for that sort of information.