Quite a bit has happened over the past few weeks. The COVID-19 epidemic has changed the business climate of the U.S., if not the world. With orders for social distancing and isolation, non-essential businesses were required to close. For the company, that means no revenue. For the employees, that means no income. The cannabis industry walks a tightrope of strict regulation, high taxation and has no safety net to catch it when times get tough.
However, in state after state, officials designated cannabis businesses as “essential,” and allowed for their operations despite other COVID-19 mandated closures. In a cruel twist of circumstances, despite all this, it looks like cannabis businesses aren’t eligible for the resulting COVID-19 related economic relief, and the industry is asking, “Why?”
On March 26, Congress passed a $2 trillion COVID-19 stimulus bill. The Small Business Association (SBA) was proactive with commerce-related assistance two weeks before that. On March 12, the SBA announced it would provide disaster assistance (low-interest loans of up to $2 million) to small businesses affected by the COVID-19 epidemic, state-legal cannabis businesses excluded. Until current rules are amended, cannabis businesses will not get a dime of relief aid from the feds. The SBA is a federal agency, and they’re not allowed to circumvent the fact that the feds still consider weed illegal. So there you go.
A group of marijuana industry trade groups is asking federal lawmakers to acknowledge the economic benefit the industry brings to the table, both at local, state and national levels. State-legal cannabis employs hundreds of thousands of individuals — estimated at 240,000 across the U.S. They also pay federal corporate taxes. On March 20, a group of significant cannabis industry associations (The National Cannabis Industry Association, National Cannabis Roundtable, Minority Cannabis Business Association, Global Alliance for Cannabis Commerce, and Cannabis Trade Federation) asked lawmakers to ensure legal cannabis businesses can qualify for these economic relief provisions.
Cannabis Workers, Unemployment Insurance, and the Small Business Administration: What You Need to Know https://t.co/Tt2y2ovVHg
— NORML (@NORML) March 20, 2020
“Our members follow strict regulations, create jobs, generate billions of dollars in tax revenue—including federal corporate tax revenue—and act as good corporate citizens,” the groups said. “Yet it appears as if these businesses will not be eligible for the same loans available to other businesses in this country at risk due to the global pandemic.”
The letter continued, “The ineligibility of cannabis businesses for disaster assistance loans is especially inequitable given that these same cannabis businesses are required to comply with other coronavirus-related measures, such as paid sick leave coverage,” the organizations wrote. “We are not seeking special treatment for state-legal cannabis businesses. We only seek to have them treated on an equal level as all other job-generating, tax-paying companies in this country.”
