Marijuana businesses that qualify for a social equity designation can now apply for state-issued grants in Colorado, according to a joint announcement from the Office of Economic Development & International Trade (OEDIT) and Jared Polis's administration.
The new Cannabis Business Office, launched earlier this year, is now accepting grant applications from marijuana entrepreneurs who've completed a state-approved technical assistance program. The grant amounts will be based on business maturity, according to OEDIT, with smaller businesses still in their foundational phases eligible for up to $25,000, and established businesses looking to grow eligible for up to $50,000.
Despite being the first state in the nation to allow recreational pot sales, Colorado has been criticized for not having social equity programs in place for communities impacted by the drug war as marijuana was commercialized. Because the plant is still federally prohibited, small-business owners often struggle to secure lines of credit, loans and other financial services from banks and credit unions, according to Cannabis Business Office program manager Tristian Watkins.
“Finding funding opportunities is an ongoing challenge that cannabis entrepreneurs face in the U.S.,” Watkins says in a statement. “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.”
Created by a bill passed in 2021, the Cannabis Business Office began providing technical assistance and industry navigation help for new marijuana entrepreneurs earlier this year. Around fifteen grants in total will be available during the first round, according to OEDIT.
To be eligible, a business must be at least 51 percent owned by a licensee who's designated under the state's marijuana social equity provision. That provision prioritizes communities impacted by the War on Drugs and requires that applicants prove at least one of the following: They or their families were arrested on certain drug charges, they earn less than 50 percent of the state median income, or they come from a community designated as a low-economic opportunity zone.
The Cannabis Business Office has around $1 million allocated for grants and $2.5 million allocated for low-interest micro-loans, according to Watkins. This first round of funding will be grants, but business owners must be able to match the grants with their own money to qualify. The funding will be eligible for business costs such as brick-and-mortar regulatory requirements, technical and expert requirements, licensing and regulatory fees, operation needs and innovative initiatives, according to OEDIT.
"Businesses will then complete the pre-application and application process, where they will prepare a project proposal detailing their projected use of the grant funds," the recent announcement reads.
Awardees must provide documentation of how the funds were spent, and there may be tax implications connected to the money, OEDIT adds.
Interested entrepreneurs have until April 11 to apply for the grant. Additional application rounds and funding opportunities are planned throughout the year.