For many would-be cannabis entrepreneurs, it often all comes down to the money.
Access to capital can present a major barrier for those interested in entering the legal marijuana industry. But the City of Sacramento now has a new way to help residents overcome that obstacle.
The City’s Office of Cannabis Management recently launched CORE Capital, a business loan opportunity for participants in its Cannabis Opportunity and Reinvestment (CORE) program.
As part of CORE Capital, individuals who are verified as CORE participants — or business entities that meet certain CORE criteria — can apply for a 6-year interest-free loan for up to $50,000. Approved borrowers also can apply for “follow-on loans,” in increments of $25,000, for a total loan amount of up to $125,000.
“CORE Capital reflects our ongoing efforts to make equity and inclusivity a focal point of our local cannabis industry,” said Davina Smith, head of the City’s Office of Cannabis Management. “I have no doubt that this new loan program will play a major role in helping to create a truly diverse industry, one that bolsters prosperity for all its participants.”
CORE Capital is funded through a $3.8 million cannabis-equity grant awarded earlier this year to the City of Sacramento by the Governor’s Office of Business and Economic Development, in partnership with the Bureau of Cannabis Control.
The loans can be used for the launch and operation of the borrower’s cannabis business, paying for items such as accounting fees, insurance, inventory, legal fees, rent and other expenses.
The loan program will be serviced by Elevate Impact Sacramento, which also operated the City of Oakland’s social equity loan program for cannabis businesses.
Loan applications now are being accepted through Elevate Impact’s online portal. Detailed application instructions and loan requirements can also be found there.
The Sacramento City Council in 2018 established the CORE program to reduce the barriers of entry into the cannabis industry for individuals impacted by the disproportionate enforcement of cannabis-related crimes in the City of Sacramento.
Participants in the CORE program receive access to cannabis-business development resources, training and mentorship, financial assistance and support services.
CORE Capital is just one of several moves the City has made recently to increase equity in the local cannabis industry. In October, the City Council approved the addition of 10 new storefront dispensary permits to CORE participants.
Though there are many ways to participate in the local cannabis industry — including cultivation, manufacturing, testing and delivery — the storefront dispensary is the most sought-after business model, Smith said.
The City previously had set a cap of 30 storefront dispensary permits, which were awarded to holders several years ago. Because of this, participants in the CORE program have had little opportunity to open a storefront dispensary, even after completing the program’s business and mentorship training.
The new permits will be allocated through a competitive “request for qualification” process, which will open in mid-December, Smith said.