Timonium, Maryland, cannabis firm Curio Wellness plans to dole out $30 million in startup capital funding to support minority business owners looking to open their own franchise storefront.
Curio, which operates medical cannabis growing, processing and dispensing businesses in Baltimore County, announced the creation of the investment funding program Tuesday. The company plans to support up to 50 women, minorities and disabled veterans who want to start businesses in the cannabis market to become Curio Wellness franchisees. In statements, Curio said the fund "will allow the medical cannabis and wellness company to further its goal of serving patients with safe, effective and reliable cannabis-based medicine."
The funding effort will also support Curio's plans to expand its footprint beyond Maryland. The company is rolling out its Wellness Center retail business model, through which it plans to create a network of cannabis dispensaries across multiple states. The fund will operate as a legally separate but affiliated entity from Curio Wellness, under the named Curio WMBE Fund, and will connect investors with women, minority and veteran entrepreneurs aspiring to break into fast-growing and lucrative cannabis markets nationwide.
Representatives with Curio could not immediately be reached for additional comment on this story.
It is widely acknowledged that women, minorities and disabled veterans traditionally face greater difficulties in accessing capital to build a new business. Often, business owners in these groups are overlooked by institutional investors or lack access to wealth through their family and friends. Those prevailing disparities are further compounded in the cannabis space by the fact that banks and other traditional financing sources shy away from funding businesses participating in the industry, due to cannabis' prevailing classification as a federally illegal Schedule I drug.
Lack of access to startup capital is among the reasons cited for why Maryland's burgeoning cannabis industry has lacked sufficient diversity in business ownership, especially among growing and processing businesses. State legislators, regulators at the Maryland Medical Cannabis Commission and industry stakeholders have been working to close the diversity gap through various initiatives, including doling out 11 new growing and processing licenses to minority and women business owners this year.
Michael Bronfein, CEO of Curio, said the investment fund effort was established in recognition of the barriers underrepresented business owners face in the industry, as "a solution that directly addresses this massive economic disparity." Curio hopes the success it has found with its own brand and business model of the past four years can be replicated among its future franchisees.
The fund will provide up to 93% of the startup capital needed to launch a Curio Wellness Center branded dispensary, the company said, and the business owners who receive funding will be able to pursue 100% ownership in their franchise businesses in the years following an equity investment.
“The fund will expand diversity and enable economic empowerment for entrepreneurs who otherwise would be locked out of the rapidly growing field,” Jerel Registre, director of business development at Curio and managing director of the WMBE Fund, said in a statement.
Curio plans to open its franchisee application process in early 2021, pending regulatory approvals to execute on the business model.
There may not be a slew of new Curio storefronts cropping up in Maryland, though. According to Maryland's cannabis industry regulations, licensed cannabis business entities may take over existing dispensaries and own up to four retail locations at one time. However, state regulators do not currently have plans to increase the number of dispensary business licenses available beyond the 102 they initially cleared in 2016.
