Colorado Marijuana Social Equity Provision Receives Governor’s Signature

Cannabis Jun 30, 2020

By: Nabil Rodriguez, Associate and Victor Fox*

On June 26, 2020, Colorado Governor Jared Polis signed HB 20-1424 (the “Bill”) into law. The Bill primarily focuses on furthering social equity opportunities within Colorado by revising Colorado’s Accelerator Program participant qualifications and providing other financial incentives for participants. Furthermore, the Bill provides the Governor with the authority to mass pardon defendants who were convicted of possessing up to two ounces of marijuana.

In 2019, Colorado began outlining the rules and procedures for their Accelerator Program per Senate Bill 19-224 (the “Sunset Bill”).[1] The Accelerator Program was intended to increase mentorship opportunities and financial resources for prospective marijuana industry entrepreneurs by allowing these individuals to learn directly from state licensed marijuana operations.[2] Now, the Bill seeks to utilize the Accelerator Program as a vehicle for social equity by refining participant qualifications, increasing financial incentives, and allowing for retail marijuana store participation. Colorado legislators are hopeful that minority representation will increase in the marijuana industry if prospective minority marijuana entrepreneurs can learn directly from established, successful marijuana businesses.

The Bill incorporates social equity directives into the Accelerator Program through a variety of changes. Specifically, the Bill modifies the term “accelerator licensee” to “social equity licensee.” Second, to qualify as a “social equity licensee” applicants must, amongst other qualifications, demonstrate one of the following: (1) reside for at least fifteen years (between the years 1980 and 2010) within an “opportunity zone” or a “disproportionately impacted area”; (2) personally have been arrested or had family that was arrested for a marijuana offense, convicted of a marijuana offense, or was subject to civil asset forfeiture relating to a marijuana investigation; or (3) in the year prior to the application submission have a household income that does not exceed an amount determined by the state licensing authority.[3] Third, the Bill provides financial incentives for Accelerator Program participation by qualifying social equity licensees for incentives from the department of revenue and reducing application costs.

The Bill also includes a provision allowing the Governor to grant mass pardons to those convicted of marijuana possession. According to the Bill, “[t]he Governor may grant pardons to a class of defendants who were convicted of the possession of up to two ounces of marijuana without an application and without seeking the comment of the district attorneys and judges for those cases.”[4] This incorporation is significant because the language explicitly decreases the obstacles defendants need to overcome for marijuana related pardons by eliminating application requirements and eliminating onerous due diligence requirements such as consulting participating attorneys and judges prior to making any decisions.

Upon signing the Bill, Governor Polis expressed his support for the measure stating, “[w]e hope that this measure will be a first step for new opportunities for thousands of Coloradans who should not be living with a cloud over their head simply because they were a little bit ahead of their time.”[5] Governor Polis can begin offering pardons in 90 days, and social equity licenses for Colorado’s Accelerator Program may become available at the beginning of next year.

Colorado’s increased emphasis on social equity measures will hopefully increase minority participation within Colorado’s marijuana industry. The Accelerator Program modifications are a welcome addition considering that only 13% of Denver’s cannabis owners are Latino and only 6% of owners are Black.[6] For more information regarding Colorado’s social equity measures or to see if you qualify for Colorado’s Accelerator Program, contact a Greenspoon Marder today.

[1]https://www.colorado.gov/pacific/sites/default/files/191007%20Supplement%20to%20Final%20Proposed%20Rules_Accelerator%20Rules%20Outline.pdf

[2] https://www.ganjapreneur.com/colorado-lawmakers-approve-social-equity-expungement-bill/

[3] https://leg.colorado.gov/sites/default/files/documents/2020A/bills/2020a_1424_enr.pdf

[4] Id.

[5] https://www.denverpost.com/2020/06/29/colorado-governor-mass-pardon-marijuana-convictions/

[6] https://mjbizdaily.com/study-denver-cannabis-companies-mostly-white-owned-lacking-social-equity/

*Victor Fox is not an attorney

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