Colorado Lawmakers Broaden Social Equity Definition, Expand Licensee Eligibility


Colorado lawmakers have passed a bill that makes it easier for hopeful entrepreneurs unfairly targeted by the War on Drugs to break into the cannabis industry.

Introduced by democratic representative James Coleman on June 9, House Bill 20-1424 quickly passed through the House and Senate and was the final measure approved before the adjournment of the 2020 session.

Under the legislation, a statewide definition for “social equity licensees” was created, replacing the previous “accelerator licensee” term in Colorado’s Marijuana Code.

It now awaits a signature from Colorado Gov. Jared Polis, who will also have the ability to immediately expunge the records of those convicted of possessing up to two ounces of marijuana thanks to late amendment included in the bill.

The measure also expands eligibility for social equity license applicants to Colorado residents who meet any of the three following qualifications:

  • They have resided for at least 15 years (between 1980 and 2010) in an opportunity zone or other economically disadvantaged area;
  • The applicant or an immediate family member was arrested or convicted of a marijuana offense;
  • The applicant's prior year income does not exceed an amount that will be later determined by the state licensing authority.

Previously, Colorado’s accelerator program – which provided new licensees financial incentives and paired them with established businesses for education and mentorship -- was only open to individuals from designated economic opportunity zones.

In addition to opening up the accelerator perks to more applicants, House Bill 20-1424 also expands the program to include retail marijuana store licensees.

Both licensees and social equity applicants will be eligible to receive incentives from Colorado’s Department of Revenue or the state’s Office of Economic Development and International Trade.

Additionally, the bill opens up the ability for prospective social equity licensees convicted of a felony in the preceding three years to obtain a cannabis business license.

The passage of the bill comes about a week after a study commissioned by the Denver Department of Excise and Licenses highlighted the lack of diversity within the city’s cannabis industry.

Less than 6% of people who responded to an online survey identified as black or African American business owners, compared to 12.7% who said they were Hispanic, Latino or Spanish and nearly 75% who said they were White.

Meanwhile, 68% of respondents identified as White employees, compared to 12.1% who said they were Hispanic, Latino or Spanish and 5.9% who said they were Black or African American.

Ashley Kilroy, executive director of the Department of Excise and Licenses, said the study “sadly confirmed what was widely suspected.”

“Just like what has been seen across the state and in other legalized markets across the U.S., Denver does not have a diverse marijuana industry,” she said via a statement.

The study’s findings are consistent with a recent review of demographic data by the state’s Marijuana Enforcement Division, which found that Caucasians held the overwhelming majority of support (70%) and key (79%) licenses.

Stanford University psychologist and professor Keith Humphreys, who studies drug policy and was quoted in the report, said, “the emerging legal marijuana industry is overwhelmingly white-owned and white-dominated and provides good access to white customers.”

In addition to providing a “high-level overview of existing business and employment conditions in the Denver cannabis industry,” the data uncovered in the study was “intended to help the City of Denver determine how to implement a successful, impactful social equity program.”

Subscribe to our newsletter

The latest news, articles, and resources, sent to your inbox weekly.