TLDR:
- Denver set aside 1% of marijuana tax revenue to support minority and women-owned businesses.
- DEMI Fund, managing the tax dollars, sued Denver for not forwarding funds as contracted.
In the wake of George Floyd’s murder, Denver allocated $15 million from marijuana tax revenue to support minority and women-owned businesses. DEMI Fund, led by Danielle Shoots, was chosen to manage and invest the tax dollars. However, less than two years into the venture, DEMI Fund sued the city, claiming Denver had stopped forwarding the funds as agreed and refusing to reimburse Shoots nearly $800,000 that she had fronted to contractors to support the portfolio companies. Shoots, who is also facing financial challenges, expressed frustration with the city’s lack of cooperation and transparency.
The DEMI Fund’s contract with Denver outlined that $6 million of the $15 million would be directly invested into startups owned by women or minorities, giving taxpayers an ownership stake. An additional $6.67 million was meant for ecosystem support, and the rest for administrative expenses. Shoots provided a redacted annual report showing that 10 businesses received investments in the fund’s first year, including companies like Ad Fontes, Gritly, and Bondadosa. However, the lack of transparency and delays in payments have strained the relationship between DEMI Fund and the city.
The DEMI Fund, with investments totaling $36.1 million, has other investors like Bank of America and Xcel Energy. But access to information about Denver’s stake in the fund and individual company performance has been limited due to redactions in the annual report. Shoots has faced obstacles in receiving timely payments and claims that DEDO staffers have been uncooperative. Denver’s administration change did not improve the situation, and DEMI Fund has taken legal action with attorneys representing them in the lawsuit.
