Colorado’s governor has signed legislation addressing social equity concerns in the cannabis industry — the new law allows for additional low-level cannabis possession pardons and sets aside business licenses for social equity applicants.

Colorado Gov. Jared Polis (D) has signed cannabis industry social equity legislation which also includes provisions allowing the governor to pardon low-level cannabis possession cases up to two ounces that occurred prior to legalization in the state.

Under the law, a social equity applicant has resided for at least 15 years between 1980 to 2010 in an area disproportionately impacted by the drug war, or was arrested for a cannabis offense or had a parent, guardian, spouse, sibling, or child arrested for a cannabis offense, or had their assets seized related to a cannabis investigation, or meets household income thresholds.

The law allows groups of social equity licensees to collectively own a majority stake as long as the social equity licensee or group holds at least 51 percent ownership in the company. Social equity licensees may also be eligible for financial aid and other incentives from the state.

Previously, the state had made so-called “accelerator” licenses available but the new law changes that permit to a “social equity license” and alters the qualifications for applicants. Specifically, the license allows someone who may not qualify for a cannabusiness license to work with an established business willing to be a partner, advisor, and mentor. The bill also prohibits regulators from denying licenses to social equity applicants based solely on criminal provisions that might usually disqualify the applicant. Under Colorado law, individuals convicted of a felony in the three years prior to their application are usually disqualified; however, social equity applicants will not be rejected based entirely on that provision, according to the bill text.

The licenses will be available for retail locations, delivery businesses, and potentially social-use clubs, according to a Colorado Politics report.

State Rep. John Collins, a Democratic co-sponsor of the bill, called the measure “the first of many actions that must be taken to have racial equity in our state.”

“For decades now the Black community has been disproportionate criminalized, because of marijuana, while others have profited. We’ve needed to act on this injustice and disparity for decades, and there are people standing here who have been speaking, acting, advocating and pushing for this very moment for decades.” – Coleman during a press Monday press conference via Colorado Politics

A Denver Department of Excise and Licenses report released earlier this month found 75 percent of the city’s cannabis businesses are owned by white people, while 12.7 percent of owners identified as Latino, 5.5 percent as Black, and 2.8 percent as Middle Eastern. Women had 32 percent of “key” cannabis licenses and just 36 percent of all industry licenses, the report said.