Amendments to Statewide Cannabis Social Equity Program

Last week, the Colorado legislature took another step in dealing with some of the consequences brought about by the numerous cannabis-related arrests and convictions during the war on drugs.

House Bill 20-142, Social Equity Licensees in Regulated Marijuana, amends the current state-wide cannabis Social Equity Program in Colorado by expanding eligibility for the program to many more Colorado residents. On Friday, the Colorado legislature presented HB20-1424 to Governor Polis’s office for his signature, which he is expected to sign this coming week. You
can find the final version of HB20-1424 here.

The bill creates a new class of license for eligible applicants, a “social equity license,” which allows an individual or group of individuals to apply for an “Accelerator” business license. Accelerator business licenses are only available for retail cultivation facilities, retail products manufacturer facilities, and retail marijuana stores. Additionally, a single social equity licensee or group of social equity licensees must hold at least a 51% ownership interest in any Accelerator business.

To be eligible for a social equity license, a person must be a Colorado resident and meet one of the following requirements: 1) the applicant has resided for at least 15 years between 1980 and 2010 in a census track designated as an “Opportunity Zone” by the Office of Economic
Development and International Trade or a “Disproportionate Impacted Area,” (to be defined by MED rule); 2) the applicant or an applicant’s family member has been subject to an arrest, conviction, or civil asset forfeiture related to a marijuana offense; or 3) the applicant’s household income is less than an amount to be determined by the MED.

The Social Equity Program will allow an Accelerator licensed business to partner with a “host” Accelerator-endorsed licensed business. An Accelerator-endorsed licensed business must be a currently operating retail cultivation, retail manufacturer, or retail store that can offer technical
operating assistance, capital, and a licensed premise to an Accelerator business. The MED is expected to provide some benefits, including reduced application and licensing fees, to Accelerator-endorsed licensed businesses.
The Social Equity Program largely depends on current industry operators and/or third-party partners/financiers to provide capital assistance to social equity licensees. There is no framework for a state-wide capital assistance fund, meaning local jurisdictions must either develop their own
assistance funds or forgo public capital assistance all together.

For more information on the Colorado cannabis Social Equity Program, both locally and state-wide, and to discuss your or your business’s eligibility under the program, please reach out to
Dan Hamilton in our Denver office at dhamilton@mcallistergarfield.com.