A new Tennessee law effective July 1 has led the city of Memphis and Shelby County to dismantle its Minority and Women Business Enterprise programs, ending long-standing support that helped women- and minority-owned businesses secure government contracts and resources.
NBC affiliate Action News 5 reports the new Dismantling DEI Departments Act bans any government programs offering preference based on race, sex or ethnicity, including MWBE.
“It can be very disappointing, it can be very overwhelming,” said Sherrye Smith, a Memphis-based business owner and mentor, told the news station. “But as a business owner, we’ve hit roadblocks before.” Smith has worked closely with Lawanda Thornton, owner of Lavish, Too — a boutique in the city’s Medical District that expanded to two locations over the past seven years. She credits programs like MWBE for that kind of growth.
The act was put forward by Tennessee House Republican Aron Maberry of Clarksville. “DEI programs, while claiming to support inclusion, often create division and inequality,” Maberry said back in April. “Dismantling them is a meaningful step toward a more united, merit-based future.”
For Memphis leaders and business owners—serving a city that is nearly 64% Black—the loss goes beyond policy; it marks a significant setback for economic representation and opportunity.
Shelby County Commissioner Britney Thornton expressed concern over how the law will impact local spending, according to Action News 5. “We had the program. We were starting to train individuals on how to get county contracts and how to get city contracts, where the resources were, and now, we are being told by legal we can’t even talk about it,” she said.
Thornton added that the county’s spending with minority-owned businesses is already limited. “Somewhere between zero percent and eight percent — we were spending with minority businesses. We know that Black businesses are within that figure,” she said.
According to a 2025 Wells Fargo report, Black women own approximately 14% of all women-owned businesses in the U.S. These businesses contribute over $118 billion to the national economy each year. Despite this, growth among Black women-owned businesses has slowed in recent years, largely due to ongoing systemic barriers, including a lack of access to capital and contracting opportunities.
The City of Memphis states that it is in compliance with the law. “The City of Memphis is operating in full accordance with state law and is awarding contracts based on lawful eligibility criteria,” Tannera Gibson, the city’s chief legal officer, said, according to Action News 5.
Even with fewer institutional tools, Smith added that Black women entrepreneurs are leaning on one another. “If I don’t know how to do it, I know how to call someone else who has already been there,” she said. “It hasn’t stopped us; it slowed the wheel down.”
