Colorado Enacts Social Equity Cannabis Licensing Law

The governor of Colorado signed into law a measure designed to increase business establishment access to those traditionally excluded from the development of new marijuana dispensaries in the state. The bill, “Social Equity Licensees in Regulated Marijuana,” provides easier access to licenses for such facilities by no longer automatically denying licenses to persons with felony convictions for possessing marijuana.

Colorado has long struggled with accusations that licenses to open recreational marijuana establishments in the state went in large part to wealthy residents who moved to the state solely to open said establishments. According to the bill’s sponsor, Rep. James Coleman (D-Denver), the Act changes all that by helping to “overcome decades of inequity in an industry where black people have been criminalized and others have been able to make profits. This bill provides Coloradans who want to make an honest living in the marijuana industry with the opportunity to do so. Creating equal economic opportunity for all makes us stronger.”

Getting a license under the Act is a simplified process. An applicant must prove that they have resided in Colorado for at least 15 years or received a felony conviction relating to marijuana possession. Individuals making less than a predetermined income (the amount to be set by future rule-making) or who reside in a designated area of economic deprivation receive priority access to the social equity licenses. The applicant must also meet the general licensing requirements under Colorado law which mandate that establishments must be used exclusively to manufacture or sell marijuana products using equipment solely designated for use with such products.

Additionally, the Act also modifies the pardon powers of Colorado Governor Jared Polis by giving the Governor the explicit authority to pardon people with criminal convictions related to the possession of less than two ounces of marijuana. The Act becomes effective on January 1, 2021.