New Social Equity Cannabis Business Licenses Coming to Colorado in 2020

Wednesday, September 25, 2019

Colorado is launching a new social equity program for cannabis business licenses in 2020. The new licenses will be reserved for low-income demographics and are meant to increase diversity in the cannabis industry, while also providing opportunity for businesses that may not have access to traditional funding and training.

The program is part of an overhaul of the state’s medical and recreational marijuana regulations under Senate Bill 224, which was signed into law earlier this year. Known as micro licenses, the new permits will be limited to applicants from low-income areas identified by the Colorado Office of Economic Development and International Trade.

New businesses granted one of these micro licenses would be required to use the facilities of established marijuana companies as they research and manufacture their own cannabis products. Licensees would be allowed to cultivate, extract, and manufacture infused products, but would not be able to operate dispensaries.

The Marijuana Enforcement Division (MED) met earlier this month to establish the criteria for applicants.

“People from around the world look to us as an example on how to do things right,” MED director Jim Burack said. “What exactly is this relationship between endorser and accelerator? How do we ensure this business relationship is mutually beneficial?”

While the program is meant to increase diversity in the cannabis industry, marijuana lobbyist Shawn Coleman, who helped write define the new licenses explained, “If you’re white and you grew up in a trailer and your dad went to jail for ten years for selling meth, I can see why you’d think you’d be fit for this. This isn’t exclusive to any certain group.”

Getting established cannabis companies to participate is part of the challenge of the new social equity program. While the details are still being finalized, some of the potential incentives include reduced licensing fees, excise-tax credits, and giving priority designation for licensing transfers and updates.