The governor of Colorado announced on Monday that the state is launching a loan program to support social equity marijuana businesses.
Gov. Jared Polis (D) and the Cannabis Business Office (CBO) said the state will be providing funding through a new Cannabis Business Loan Program, in partnership with the lending company NuProject.
Because marijuana businesses are often ineligible for traditional loan programs, this state-run initiative is meant to help fill that gap and provide resources for small businesses as Colorado’s cannabis market continues to evolve.
“This landmark loan program will create and retain 239 good-paying jobs and promote equity in the cannabis industry by providing growing businesses access to funding,” Polis said in a press release on Monday. “I am committed to saving small businesses money and ensuring our state remains a great place to start and run a business in every industry.”
“Thank you to NuProject for partnering with Colorado on this exciting milestone and working to support innovation in Colorado’s cannabis industry,” he said.
I am proud of our nation-leading work to promote equity & support Colorado’s growing cannabis industry by providing growing businesses access to funding. Thanks @nuprojectorg for partnering with Colorado on this exciting milestone.https://t.co/q034OvZGMM pic.twitter.com/wtMrs2kJsO
— Governor Jared Polis (@GovofCO) April 25, 2023
The loans, which will range from $50,000 to $150,000, are meant to fund renovations, expansions, equipment costs, real estate and “working capital.” The administration said that the loans will have “favorable and manageable terms based on borrower needs.”
NuProject CEO Jeannette Ward Horton said that the company “is committed to redirecting the typical flow of financing so that small business owners in the cannabis industry, especially those who’ve been historically excluded from access to capital, can access the resources they need to grow their businesses.”
“When cannabis business owners have access to financial support and the know-how to put that funding to work, they can run better businesses and have the opportunity to build generational wealth through the cannabis industry,” she said.
This will be a revolving loan fund, supported by an initial $1 million investment. The interest collected from loan repayments will be reinvested into the program, and the state expects that the $1 million infusion will ultimately result in $2.9 million in lending over the next 10 years.
“Colorado’s Cannabis Business Loan Program is at the forefront of the cannabis industry, creating a new model to help these small business owners access the resources they need to grow and thrive,” Eve Liberman, executive director of the state Office of Economic Development and International Trade (OEDIT), said.
“Together with NuProject, the Cannabis Business Office is making it possible for cannabis businesses to grow, create new jobs and contribute to a Colorado economy that works for everyone,” she said.
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CBO said that this is its third state-supported financial program specifically designed to buttress social equity cannabis businesses. The state launched a cannabis grant program with similar goals in 2021.
While this is a first-of-its-kind loan initiative in Colorado, states like California, Illinois and Massachusetts have taken similar steps to support businesses owned by people who’ve been disproportionately impacted by prohibition.
In California, for example, officials announced a $30 million program in 2020 that provides funding to local governments to distribute grants and loans to cannabis equity businesses. That’s slightly different from Colorado’s new initiative that offers loans directly from the state government to the licensees.
Meanwhile, the Colorado House recently approved a bill that will allow adults to buy marijuana online—which supporters say will help businesses that have depended largely on cash transactions that put them at risk of crime.
The state has taken steps to promote energy efficiency in the cannabis sector and also ensure social equity in the industry is prioritized as it continues to grow and diversify.
The governor recently touted the state’s first-ever marijuana vending machine, which can package, label and dispense cannabis products to adult consumers—with transactions being completed in as little as 50 seconds.
Last year, Polis signed an executive order to provide broad professional licensing protections for workers who use marijuana in compliance with state law. The move also prevents state agencies from assisting in any out-of-state investigations related to lawful cannabis conduct that could result in employment penalties.
Colorado officials have also repeatedly called on the federal government to enact reform, and the governor contacted U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra to inquire about the timeline for the agency’s review into federal marijuana scheduling that President Joe Biden directed last year.
The state has also been a hub for bold psychedelic reform, with voters approving a ballot initiative last year to legalize certain entheogenic substances and allow psilocybin therapy.
Last week, Colorado senators approved a bill in committee to set up a regulatory framework for legal psychedelics under the voter-approved measure. The proposal has received mixed feedback from advocates and stakeholders so far—including in hours of testimony at a hearing last week.
The ballot initiative called for the creation of an advisory board to develop regulatory recommendations to inform more holistic legislation covering such access, but as that process continues, the Senate president filed the separate bill last week to establish rules.