Tim Cullen ran into an unexpected obstacle recently when he decided it was time his cannabis business should start donating money to nonprofit organizations.
“I have been shocked at how few places will take our money,” said Cullen, CEO of the Colorado Harvest Company chain of shops and a shareholder with O.penVape, a company that makes vape pens.
But then Levitt Pavilion Denver came calling. O.penVape and Colorado Harvest Company together donated $250,000, becoming the largest private donors of a project to build an amphitheater in Ruby Hill Park in southwest Denver that will host 50 free concerts each summer among several other events.
Philanthropy is something a number of marijuana businesses have begun to explore as profits roll in, but Cullen is not the only one who has faced difficulty in finding a group that will accept cannabis-funded donations.
However, giving back remains important to many in the cannabis industry.
“I think philanthropy is what responsible businesses do. It’s not a choice so much as the next logical step,” Cullen said.
Finding the right fit
In the three years since recreational marijuana sales started in Colorado, some nonprofits have decided not to accept money from marijuana organizations for various reasons, whether it’s the fear of losing nonprofit status or because they receive federal funding or the cannabis industry doesn’t align with their organizational goals.
But for groups that have been searching and have yet to find a nonprofit that will take their charity, those groups might not be looking in the right places, says Kelly Perez, CEO of the KindColorado Foundation.
KindColorado seeks to enhance community engagement and social giving from emerging businesses — such as cannabis — for beneficial local impact.
“It’s silly to not just explore all options and see what kind of relationships you can have,” Perez said.
So far, a cannabis company has contributed to the Montbello neighborhood’s efforts to celebrate its 50th anniversary and others have been connected to nonprofits that are open to accepting cannabis money, according to Perez.
Rich Male, a 40-year community activist in Denver who now works with KindColorado, said partnerships like these could lead to others relaxing their rigid stances on marijuana money.
“As cannabis becomes part of the community, the issue will be more acceptable and mainstream and we won’t have these kinds of issues,” Male said. “But initially, we’re dealing with a new idea, which is controversial where a lot of people are hesitant and resistant.”
Careful consideration of cannabis cash
For some nonprofits, such as the Rocky Mountain MS Center in Westminster that aids those who have multiple sclerosis, accepting marijuana-based donations required considerable vetting.
According to development director Jules Kelty, the board had extensive conversations about whether to accept such donations and ultimately decided that it would allow it.
“There was a lot of back and forth. We had to do due diligence and talk to experts in the industry and outside the industry to make sure the organization would be OK,” Kelty said. “We wanted to make sure we did what is right for the organization and our patients.
“One big piece that helped us decide is that many MS patients use cannabis to help treat their symptoms and it seemed hypocritical to not work parallel with an industry that had helped them.”
Regulatory issues have dissuaded some nonprofits. Colorado Children’s Hospital Foundation cites banks that won’t handle cannabis money as a reason it won’t accept donations.
While federal decriminalization and banking complications may not see immediate change, other nonprofits that have decided not to accept donations for other reasons might be missing out on a good opportunity to get funds from groups that truly want to give.
Marijuana is kept in display jars for customers to smell at the Colorado Harvest Company shop in Aurora, Colo., in September 2015. (Brennan Linsley, Associated Press file)
“I think there is some misunderstanding oftentimes between cannabis (businesses) and nonprofits where nonprofits assume what cannabis wants out of donations is marketing and visibility, and we find the industry does not want that,” said Courtney Mathis, COO of KindColorado.
Shannon Brooks, director of marketing and co-owner of the Lightshade shop chain, notes that cannabis businesses can’t write off their donations on tax filings, meaning they are not benefiting from any deductions.
“Some businesses like to make donations so they can write off,” Brooks said. “Those giving back from cannabis organizations really are doing it for the right reasons. I do think the public needs to know that is the case.”
Amanda Gonzalez, CEO of retailer Kaya Cannabis, recently began philanthropy efforts within her business and found difficulties. She said it’s been a mix of groups either saying yes or no or asking for anonymous donations. Others may ask for service donations as opposed to cash.
“It really varies. We were looking for breast cancer organizations during October (for breast cancer awareness month). Some locals said they could not accept from us, one national organization said they could. It took a lot of hunting,” Gonzalez said. “I do think it’s improving. As the industry is improving, communities get to know us better. People are beginning to realize that not only is it not a bad thing, it might be a good thing.”
‘We will be a good example’
As it happened with Levitt Pavilion Denver, which is a chapter of a national nonprofit based in California, local executive director Chris Zacher initially made the call to Colorado Harvest Company, but he still needed permission from the national organization.
“We took it to Levitt, they took it to the board and as long as it is legal in their state and not promoting the sex trade or tobacco, they were fine with it,” Zacher said.
Despite being in a city park, Denver did not support nor disapprove of any funds coming from a cannabis organization. The city allowed Levitt to make its own decision, according to city licensing spokesman Dan Rowland.
Cullen said he thought the situation would be a win-win, as he gets to help a community organization in an area his company resides in and Levitt got some much-needed money to fund its nearly $5 million project. Colorado Harvest Company and O.penVape will be the headline sponsors for the pavilion.
“I think the true winners will be the people who get to enjoy Levitt Pavilion for the next 30 years and all the awesome memories they will make there, and we’re glad we get to be part of it,” Cullen said. “We will be a good example of how cannabis companies can work with a city municipality and a nonprofit and have a successful outcome for all groups involved.”