While many businesses are gaining access to coronavirus relief funds, the cannabis industry has been left out due to federal restrictions. A group of federal lawmakers is pushing for new legislation that would give some small cannabis businesses access to coronavirus aid.
Lawmakers in states where marijuana is legal are pushing for a bill to allow cannabis-related businesses access to COVID-19 relief funds that other industries are receiving. On April 23, Reps. Earl Blumenauer (OR-D) and Ed Perlmutter (CO-D) introduced legislation that would make cannabis businesses eligible for Small Businesses Administration (SBA) COVID-19 relief programs.
“As Congress seeks to provide relief to small businesses across America, chief among those being left out are state-legal cannabis businesses that are essential to communities and have met the demands of this crisis,” Rep. Blumenauer, founder and co-chair of the Congressional Cannabis Caucus, said in a statement. “We should include state-legal cannabis in federal COVID-19 response efforts.”
On March 27, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which provides “emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic.”
Under the act, the SBA received $350 billion in funding to adjust existing loan programs and create a new loan program to assist small businesses across the nation who have been adversely impacted by the COVID-19 emergency.
The marijuana industry is ineligible to receive any emergency relief funds since marijuana is illegal federally. In response, lawmakers have introduced the “Emergency Cannabis Small Business Health and Safety Act” which would ensure cannabis businesses are included in federal COVID-19 relief funds for small businesses.
The legislation would grant state-legal cannabis businesses access to three specific relief services from the Small Business Administration (SBA): the Paycheck Protection Program, Economic Injury Disaster Loans program, and Economic Injury Disaster Loans Emergency Grants program.
A collection of bipartisan cosponsors who are supporting the bill sent a letter to Congressional leaders urging them to take action. According to the letter, the cannabis industry employed 240,000 workers across the country and generated $1.9 billion in state and local taxes in 2019.
“State-legal cannabis businesses need access to CARES Act programs to ensure they have the financial capacity to undertake the public health and worker-focused measures experts are urging businesses to take. This includes access to and participation in SBA’s loan programs—financial support that is designed to pay workers, group health care benefits, and family or sick leave,” Blumenauer and the other lawmakers wrote.
Find the full text of the bill, here.
Marijuana Left out of Federal COVID-19 Relief Funds
Back in March, the SBA confirmed that cannabis-related businesses, outside of the hemp industry, were not eligible for federal economic relief funds.
With the exception of businesses that produce or sell hemp and hemp-derived products (Agriculture Improvement Act of 2018, Public Law 115-334), marijuana-related businesses are not eligible for SBA-funded services (OMB, 2 C.F.R. § 200.300).
— SBA Pacific NW (@SBAPacificNW) March 23, 2020
Not only are businesses that work directly in the cannabis industry not eligible, but businesses that indirectly work with the industry are also ineligible for the CARES Act, signed by Trump last month. The act provides for a Paycheck Protection Program that offers a substantial amount of forgivable loans to companies employing 500 people of less.
The act includes a section describing businesses who are ineligible for the relief which includes businesses, “engaged in any activity that is illegal under federal, state, or local law.”
Cannabis remains illegal under federal law and classified as a Schedule I Controlled Substance, despite 11 states, plus the District of Columbia, legalizing full cannabis access, along with the 33 states who have legalized medical marijuana.