Cannabis Tax Will Fund Minority-Owned Businesses | David Heitz
By David Heitz/NewsBreak Denver
(Denver, Colorado) A city of Denver fund that will help people of color start or revive businesses will soon begin distributing money.
The Denver City Council will consider a $15 million contract with the New Community Transformation Fund on Monday to administer the program. The fund is named after Herman Malone, “one of Denver’s pioneer black business owners,” according to a staff presentation to the board.
Mayor Michael Hancock partnered with former City Council Speaker Stacie Gilmore to create the fund using 1% of the city’s cannabis tax. “The fund, which is expected to generate between $4 million and $5 million annually, will focus on strengthening Denver’s economic diversity while providing quality employment opportunities, ensuring a pipeline of entrepreneurs and small businesses starting up and creating generational wealth for Denver business owners who have always lacked. investment opportunities,” explains the staff presentation.
How the program will work
The New Community Transportation Fund, or NCTF, has agreed to employ women or people of color for at least half of its contractors on the project.
The NCTF shall:
· Develop an ecosystem of technical assistance and professional support.
· Develop a pipeline of businesses that will be supported by capital preparation and hands-on technical assistance and/or professional support.
· Conduct due diligence with companies to determine if they are prepared to invest in ways that address the systemic inequities faced by companies.
· Invest directly in capital-ready companies. Continually seek additional funding for operational and programmatic capital.
Level the playing field
An important part of the program will be to provide “culturally relevant” services, according to the contract. “He is focused on directing funds to underfunded businesses by designing programs that are culturally relevant and delivered by a trusted community that is like them,” city staff wrote in a memo to council.
In a presentation to council, city staff said the new community transformation fund “believes in a more diverse economy, driven by the economic prosperity of communities of color in Denver and Colorado.”
The fund levels the playing field. “With greater access to capital and essential support services, the NCTF creates upward mobility for entrepreneurs who have not had this opportunity historically.”