Cannabis Industry Needs Financial Relief, Too: Senators and Advocates Agree
Posted by Marijuana Doctors on 04/10/2020 in Economics
Medical content reviewed by Dr. Joseph Rosado, MD, M.B.A, Chief Medical Officer
Are cannabis companies small businesses whose employees need federal support during the COVID-19 pandemic? Yes, say many elected politicians. Led by Jacky Rosen (D-NV), 11 senators have asked the Appropriations Committee for access to COVID-19-related assistance for U.S. marijuana businesses. This move would protect jobs in the industry and help companies stay afloat at this challenging moment. Specifically, it would bring changes to Small Business Administration (SBA) policy and that would give marijuana companies a shot at up to $2 million in relief under the SBA’s Loan Guarantee program—part of the $349 billion allocated for small businesses under the CARES act.
Other signatories include four former presidential hopefuls, Sen. Bernie Sanders, Sen. Kamala Harris, Sen. Kirsten Gillibrand, and Sen. Cory Booker. The senators’ request follows earlier pleas by industry leaders like the National Cannabis Industry Association and advocacy groups such as National Organization for the Reform of Marijuana Laws (NORML) and Marijuana Policy Project (MPP).
For the last several years, the federal government has allowed states to set their own policies on legalization for medical or recreational purposes. Cannabis businesses operate under strict state regulations, contribute to state and federal tax revenues, and employ over 200,000 people across the U.S. Moreover, marijuana companies, like all businesses in the U.S. economy, are expected to comply with state and federal mandates in response to COVID-19.
But even while contributing to economic stability and following the rules, marijuana businesses don’t automatically qualify for relief because the product is still illegal at the federal level. (The SBA had previously made clear that hemp-only businesses, not marijuana-based ones, would qualify for assistance.)
The impact of COVID-19 on the cannabis industry is yet to be fully understood. Initially, sales jumped as patients and consumers stocked up in preparation for social distancing or quarantine conditions. A number of states, like California and Colorado, have deemed all cannabis dispensaries essential services on the level of gas stations and grocery stores; others, like Massachusetts, have temporarily suspended recreational sales while keeping the doors of medical dispensaries open. Most states with established marijuana sales put temporary allowances in place for curbside pickup or delivery in order for businesses to supply product while maintaining safe social distancing.
But industry stock prices have declined, jobs have been lost, and some retail outlets have permanently closed as a direct result of COVID-19. If the Appropriations Committee heeds the senators’ call, it could make a big difference in the health and viability of the industry.
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