The Herman Malone Fund, named for a longtime minority business activist, received a $15 million investment Monday. The $15 million is 1% of Denver’s cannabis sales tax revenue and increases city investment in woman and minority owned businesses. 

The Malone Fund by way of the sales tax is expected generate between $4 and $5 million annually according to the Denver Office of Economic Development and Opportunity (DEDO). It focuses on supporting businesses and business owners that have traditionally lacked the opportunity to create generational wealth, the DEDO said. It hopes the fund will strengthen the city’s economic diversity.

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Malone was one of Denver’s trailblazing Black business owners, according to a DEDO presentation, and died in 2021. He was chairman of the National Black Chamber of Commerce.

The Malone Fund is one small part of the overall New Community Transformation Fund – Denver, the partner selected to administer and manage investments to qualifying businesses. The New Community Transformation Fund is an investment firm that underwrites Black, Indigenous, and people of color (BIPOC) businesses. Denver is one of two affiliates, with the second in Grand Rapids, MI. 

“The Fund will level the playing field for small businesses in Denver that have been traditionally under-resourced because Denver’s prosperity has not been spread equally across the business community and business hopefuls,” the contract’s scope of work reads. “Denver businesses should have access to the funding and tools they need to be successful in this market.”

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The three-year contract outlines a dollar amount limit on how much the marijuana tax can finance the Malone fund for each year. During the first year – 2022/23 – the fund it can receive up to $5.2 million. In year two, 2023/24, $4.9 million will be invested, and by year three, 2024/25, another $5 million will be put into the program. The contract cannot exceed a three year total of just under $15.2 million, and yearly sales tax revenue is subject to city approval each year. 

“We anticipate two, one-year extensions to be provided to NCTF-D in hopes of achieving a $50M evergreen fund to support under-resourced businesses,” the resolution request from Sept. 30 reads.

The Malone Fund is Denver’s first equity-focused investment tool, according to the resolutions, and supports the city’s desire to let equity based choices drive decisions. Denver leaders believe equity is “when race and other social identities can no longer be used to predict life outcomes,” such as the acquisition – or lack thereof -of generational wealth. 

“The next steps are being fleshed out now but NCTF-D is already operational and making investments currently with other funds at their disposal,” Michael Bevis, a member of DEDO’s innovation and entrepreneurship team, said. “The Malone Fund will be added to this for future investments.”

The contract with NCTF-D was unanimously approved in the Oct. 12 Business, Arts, Workforce & Aviation Services Committee, sending it to council. On Monday, the council unanimously approved the contract. 

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A resolution adopted Monday also initiated affordable house construction in the Globeville neighborhood. The agreement, valued at just over $50,000 authorizes Globeville Redevelopment Partners, LLC to conduct a feasibility study for building affordable housing with commercial space at 4995 Washington Street.

The lot was once a car dealership but now stands empty. 

The city council also took steps to winterize Denver’s streets by purchasing $25 million worth of deicing materials for use citywide. This comes as snow falls on the mountains and serves as a reminder to Denverites: Winter is coming.