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How much is the cannabis industry willing to do for Colorado’s new social equity entrepreneurs?
When Colorado became the first state to legalize recreational marijuana in 2012, it didn’t have a playbook.
While developing the early rules on sales and taxation, the state initially ignored how the years of marijuana criminalization had impacted historically marginalized communities and whether those communities should be given special access to opportunities in the cannabis industry.
But in the years that followed, other states that legalized recreational marijuana took these issues into account and incorporated social justice into their programs.
Colorado is now playing catch-up in social justice. On October 1, Governor Jared Polis pardoned 2,732 previous convictions of marijuana possession. When he signed Senate Act No. 111 earlier this year, he approved $ 4 million in aid to marijuana entrepreneurs with social justice. And on April 20, the unofficial stoner holiday, Mayor Michael Hancock signed the Denver Social Justice Program, which began accepting license applications in June.
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But has the state gone far enough? This was the focus of a discussion hosted by the Black Cannabis Equity Initiative (BCEI) on August 27, which was attended by dozens of industry experts, organizations, government officials and current social justice applicants.
“Historically, we’ve seen Colorado grow its social justice programs,” said Jordan Wellington, partner at VS Strategies. “The initial funding is $ 4 million. I don’t think we’re going to stop there. We will certainly ask for more – but this is a great start to this program. ”
An applicant for a Colorado social justice program must be a resident of a state and must not have revoked a cannabis business license. An applicant must also meet at least one of the following criteria: Have lived for fifteen years, between 1980 and 2010, in a zone of opportunity or disproportionately affected area designated by the Colorado Office of Economic Development and International Trade; has been arrested for a marijuana offense or an immediate family member has been arrested for a marijuana offense; have a household income that does not exceed 50 percent of the national median income.
Additionally, those who get a social equity license must own at least 51 percent of the marijuana business.
“A lot of whites talk to each other, they don’t talk to blacks about what we think,” said John Bailey, BCEI’s chief coordinator. “In the end, they think they know what the relationship should be, so they lead their clients in that direction. I think part of what happens is that people need a different perspective to help them to lead their goals. ” Clients so that their best practices and thinking can have a social justice dynamic and help them consider how their actions could affect the community they don’t know about. ”
Aja Palomino, a social equity licensee, has been in the cannabis industry for four years. Without her background and the connections she has made, becoming a successful entrepreneur would have been almost impossible.
The biggest hurdles were fundraising and the search for new industry perspectives, she said. Building a successful business can mean nodding your head or shaking larger industry players. “The exclusivity for licensing and delivery seems really great in theory, but how much it will open up more options for us is questionable. It was a difficult process, ”said Palomino. “This whole program is amazing, but it’s limited in some ways. Without the right connections, status, and resources, there’s only so much you can do. ”
William “Willie” Denney had worked in the cannabis field for years and reached out to Green Dragon, one of the pharmacies he had worked for, about a year ago about his social justice status. He had signed up for the state’s accelerator program, which gives social justice licensees the opportunity to work with existing companies willing to provide technical assistance and capital.
But Green Dragon wasn’t interested, nor were several other companies he spoke to. “I look for companies every day,” says Denney. “I can’t get a contract until someone is willing to work with me or do the accelerator program. That’s the problem I ran into: Nobody wants to give up that 51 percent of property. ”
Corporate gatekeeping is another concern. Denney noted that Green Dragon’s delivery service, Eaze, is a multinational that is now available through the Apple Store. The potential for small businesses to enter the market could go away if they compete against big tech, he warned;
In recognition of these issues, the BCEI developed a report to measure a cannabis company’s contribution to social justice – something Selena Dunham, director of consulting firm Classique LLC, believes is necessary to hold the industry accountable. “I hope every conversation we have as big players like Amazon try to get into the industry, we remember the importance of holding people accountable, measuring results and making sure they are our communities are investing again, ”she said. “Overall, within the cannabis community, we are a long way from trust, truth and transparency. We have the conversations and I think people are polite and have good intentions, but I also think people are just waiting to see what happens and by sliding through something. ”
For entrepreneur Curtis Washington, the biggest challenge was finding a location for a marijuana retail outlet. “I’ve spent a lot of time trying to find a suitable or approvable location,” he said, explaining that Denver’s 1,000-foot buffer restrictions and the number of stores in place make it very difficult to enter.
Lisa Gee of Lightshade Dispensaries said barriers to entry for social justice applicants and a “protectionism philosophy” that surrounds the industry pose additional threats.
“There is so much support that is needed to get people into a position where they are comfortable running their own business,” she explained, adding that there is an invisible wall that budding entrepreneurs have to face blocked You are entering a mature market that is already protectionist. ”
However, Victoria Osler, an Aurora entrepreneur, said she believed the social justice programs had opened up many opportunities for her hospitality company, Dreamy Illusions, and she encouraged other applicants not to be discouraged. “We have to stop thinking that we can do it on our own. People want to help us, ”she advised. “It takes time and a lot of work, but don’t be discouraged. This is all new to us and we deserve to be here. ”
According to Molly Duplechian, a policy analyst with the Denver Department of Excise and Licenses, the office currently has five pending applications for a social justice marijuana retail business. It has already issued five transportation and delivery permits and licenses, but the office has not received any new cultivation or production facility applications. Hospitality licenses for social justice applicants will open in November
According to Will Lukela, head of licensing for the Marijuana Enforcement Division (MED), the state has approved twelve social justice applicants by August 1, and 118 applications are pending review. Accelerator endorsement has been approved and an application is pending; an accelerator shop was approved. The state has not received any requests for social justice for accelerator cultivation or manufacturers.
The new cannabis business office at OEDIT will determine how the $ 4 million will be distributed. According to Tristan Watkins, the office’s new program manager, $ 2.5 million will be used for loans, $ 1 million for grants and half a million for technical assistance.
“We’re going to be very learning and teaching oriented in this regard, making sure we can really provide the basic information that will give applicants the best chance of success,” said Watkins. “We want to make sure that this is not just lip service, but that what we do is actually making an impact at the end of the day.” The office is currently working with individuals outside of lenders for loans and will soon provide grant values to licensees of announce social justice.
“Progress is being made, but very, very slowly,” concluded Dunham. “I’m cautiously optimistic about where we’re going and there is still a lot to be done.”