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Congress considers allowing COVID-19 relief for cannabis companies

April 23, 2020

After being shut out of the early rounds of federal COVID-19 relief funding, state-legal cannabis companies saw some hope today with the introduction of the Emergency Cannabis Small Business Health and Safety Act.

The bill would allow cannabis companies to access the COVID-19 relief funds available to other small businesses.

The bill, introduced by Rep. Earl Blumenauer (D-OR) and Rep. Ed Perlmutter (D-CO), would end the Small Business Administration’s exclusion of cannabis businesses—and those that provide services to them—from further federal relief funding.

Under the current Small Business Administration (SBA) policy, businesses that deal directly with cannabis production and sale, as well as many that provide services to them, are ineligible for any SBA programs. Many indirect businesses have not been declared essential and have been forced to close.

Cannabis businesses that have remained open must contend with declining sales, supply chain disruptions, onerous tax rates, lack of access to banking services, and the costs incurred by implementing additional health and safety measures to protect employees and customers.

Essential but not eligible

“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,” said Rep. Blumenauer, founder and co-chair of the Congressional Cannabis Caucus. “We should include state-legal cannabis in federal COVID-19 response efforts. Without providing these businesses the relief needed to carry out the recommended public health and worker-focused measures, we are putting these hard-working people—and ourselves—at risk.”

“Cannabis businesses are major employers and significant contributors to local economies in Colorado and across the country,” said Rep. Perlmutter. “They should receive the same level of support as other legal, legitimate businesses and be eligible for SBA relief funds during this COVID-19 crisis.”

240,000 workers nationwide

Last week Blumenauer led a bipartisan coalition of nearly three dozen members of Congress who called on House and Senate leaders to include cannabis businesses in any future coronavirus relief programs.

“The state-legal cannabis industry is a major contributor to the U.S. economy and workforce, employing over 240,000 workers across 33 states and four territories, and generating $1.9 billion in state and local taxes in 2019,” the coalition members wrote.

Many of those workers have been laid off or furloughed, even though most states have declared cannabis stores and dispensaries to be “essential” businesses. “However,” wrote the coalition members, “unlike other small businesses, cannabis businesses are not eligible for the CARES Act programs.”

Because of federal banking rules, cannabis companies are also not eligible for small business loans or lines of credit that may help keep other businesses afloat in the midst of a global pandemic.

Related
Cannabis Jobs Report: Legal cannabis now supports 243,700 full-time American jobs
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Leafly Staff

Leafly is the world’s largest cannabis information resource, empowering people in legal cannabis markets to learn about the right products for their lifestyle and wellness needs. Our team of cannabis professionals collectively share years of experience in all corners of the market, from growing and retail, to science and medicine, to data and technology.

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