The Cannabis Business Office (CBO) within the Colorado Office of Economic Development & International Trade (OEDIT) announced the first recipients of Colorado’s Cannabis Business Loan Program, implemented in partnership with mission-based lender NuProject. These loans will help social equity licensed cannabis businesses expand operations, increase revenues, and retain or create new jobs.
“Small businesses are an engine of Colorado’s economy, and we are thrilled to promote greater equity in the cannabis industry while making it easier for these businesses to grow. By expanding operations and adding new services, they will be poised to increase revenues, improve the longevity of their businesses, and create new jobs. That’s a win for the businesses, their communities, and Colorado’s economy as a whole,” said Eve Lieberman, OEDIT Executive Director.
Traditional funding sources designated for small businesses often preclude the cannabis industry, causing cannabis business owners to experience increased difficulty accessing capital as they grow their businesses. To help fill this funding gap, the Cannabis Business Loan Program provides loans between $50,000 and $150,000 for renovations or expansions, the purchase of equipment, real estate, or use as working capital.
The businesses receiving loans during the first round of funding are:
IDY Distributors
Denver-based IDY Distributors offers distribution services for the state’s cannabis industry with a focus on growing markets and consolidating product ordering for retailers. The loan will allow IDY to expand its service offerings to include warehousing and fulfillment of retail orders for many of Colorado’s top cannabis brands. The business model expansion allows for the creation of new job opportunities for the local community.
Simply Pure
Owned by the first Black Veteran cannabis licensee in the nation, Denver-based Simply Pure will use this loan to complete a dispensary exterior remodel and start delivery services with Puff Pass, a Black-owned social equity company. In addition, the funds will be used to increase SEO and digital marketing to promote delivery and local outreach. The company estimates that the impact of both these upgrades could result in $20,000 to $30,000 more revenue per month.
“As their partner in the Cannabis Business Loan Program, NuProject enables Colorado to distribute funding quickly to businesses, which is critical for a fast-growing industry. The cannabis businesses announced today are just the type of high-growth businesses states are smart to support with funding. Filling this funding gap better positions Colorado to benefit from the economic growth of the cannabis industry, adding jobs and increasing tax revenues for schools,” said Jeannette Ward, NuProject CEO.
NuProject helps diverse entrepreneurs grow their cannabis businesses and specializes in character-based lending, which helps business owners obtain loans even if they lack the traditional assets necessary to secure financing or have experienced other challenges obtaining financing. NuProject also provides educational assistance and mentorship to assist business owners in preparing for loan applications and will manage the Cannabis Business Loan Program as a revolving loan fund in partnership with the CBO. The initial $1 million investment is expected to lend approximately $2.9 million over the next 10 years, creating and retaining important jobs in Colorado. Qualified cannabis businesses can apply for a loan during the second round of funding, which is currently open.
The Cannabis Business Loan Program is one of several CBO funding sources available for Colorado’s social equity-licensed cannabis businesses. The Cannabis Business Grant provides $20,000-$25,000 Foundational and Foundational Plus Grants to help early-stage cannabis businesses with their startup needs and $50,000 Growth Grants to support existing cannabis businesses as they grow or refine their operations. The Cannabis Business Loan Program is designed to support larger, more established cannabis businesses as they continue to grow.
Source: oedit.colorado.gov