The burgeoning legal cannabis industry can serve as a new beginning for some—at least, for those with entrepreneurial dreams. Unfortunately, however, not everyone with a simple dream can successfully run a business, especially in a brand new, heavily-regulated space like legal marijuana.
But Chicago Entrepreneur Seke Ballard’s new initiative will hopefully that reality for 100 Illinois social equity applicants hoping to win licenses to operate recreational pot shops when the plant is legalized on January 2nd.
Ballard Plans to Front Marijuana Dispensary Application Fees
The 35-year-old Ballard, who believes people of color are being “underrepresented” throughout the application process, told the Chicago Sun-Times that he will offer, at the very minimum, 100 social equity applicants no-or low-interest loans for $2,500 that will cover the application fee for receiving a dispensary license.
“We’re not going to wait on the state we’re not going to wait on the city,” Ballard said.“We are going to make sure that at least 100 social equity applicants have the support and knowledge they need to submit complete, compelling applications.”
Ballard owns the Seattle-based startup Good Tree Capital, a financial institution that lends money to small cannabis firms. The company is meant to provide prospective business owners with an alternative to traditional banking—which has, for the most part, strayed away from doing business with cannabis companies.
“Most cannabis businesses can’t obtain bank accounts or loans, leaving owners to rely on outside investors to fund their business growth, ” their website states. “Good Tree Capital offers an alternative. We provide lines of credit, term loans, commercial real estate financing and equipment financing.”
Ballard’s company will finance the first round of pot licensee applications for companies and individuals who don’t already have a stake in the industry. According to the Chicago Sun-Times, applications will be accepted between Dec. 10 and Jan. 2. The state is set to legalize recreational sales on January 1st, giving applicants an additional day to apply for the financing.
While financing isn’t limited to those deemed as “social equity applicants,” they will have a marked edge. To qualify as a social equity applicant, you must meet certain criteria, including living in an area that’s been disproportionately impacted by past drug policies for five of the last ten years or having been arrested for or convicted of a minor pot offense.
To qualify for a loan, social equity applicants are required to fill out a separate form online before November 1st.
“We’re going to provide you with the capital,” Ballard said. “We expect to be paid back, but we’re not trying to make a profit off of you. We just want to make sure you’ve got the resources you need.”
Applicants Have Options
As an alternative, social equity applicants can apply for a state waiver which would finance half of their application fees. Of course, there are always other avenues they can take, like consulting with another venture capital firm, angel investors, or traditional online lending.
Either way you slice it, Chicago’s brand new set of marijuana laws— and the opportunities that will undoubtedly come with them—can serve as a major spark for the state and its economy.
“It’s a snowball effect,” Ballard said back in September. “And this is a once-in-a-generation opportunity for people who come from communities that look exactly like this community that we’re in now to really use that spark to jumpstart economic development in those areas.”