The federal Small Business Administration (SBA) reiterated on Monday that marijuana companies are not eligible for disaster relief loans to lessen the blow of the coronavirus outbreak.
Because cannabis remains illegal at the federal level, the marijuana industry is being denied access to these aid opportunities, including programs administered by SBA. The agency’s Northwest branch confirmed that in a response to a tweet from a cannabis business owner who inquired about eligibility.
“With the exception of businesses that produce or sell hemp and hemp-derived products [that were federally legalized under the 2018 Farm Bill], marijuana-related businesses are not eligible for SBA-funded services,” the post states.
Greg Hubly, the Washington State-based business owner expressed frustration and said there are “10 families I’m responsible for and know all this talk about business relief is just more bullshit messaging for my industry.”
SBA recommended that he explore relief options provided by state or local agencies.
Last week, an SBA spokesperson similarly clarified that marijuana companies aren’t getting a cut of the federal dollars being appropriated for business disaster relief.
“Because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to businesses that are illegal under federal law,” SBA’s Carol Chastang told Cannabis Business Times. “Businesses that aren’t eligible include marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law.”
This barrier to aid access for what’s becoming a massive industry in states across the U.S. has elicited strong pushback from reform advocates and stakeholders.
A coalition of marijuana industry trade groups—including the National Cannabis Industry Association, National Cannabis Roundtable, Minority Cannabis Business Association and Cannabis Trade Federation—signed a joint letter last week, urging congressional leaders to lift restrictions and allow cannabis businesses to obtain the same relief as any other legitimate market.
“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 letter said. “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.”
There have been some legislative attempts to address the problem. A bill filed last year by the chairwoman of the House Small Business Committee included provisions that would enable marijuana businesses to access SBA services, and language from that legislation was later inserted in another comprehensive reform bill that cleared the House Judiciary Committee.
NORML, meanwhile, is reaching out to lawmakers asking them to ensure that marijuana industry workers are not discriminated against when it comes to unemployment benefits amid the pandemic.
The business end of this crisis is just one part of the issue for drug policy reform advocates. A growing number of campaigns to change state and local drug laws have been upended, with signature gathering efforts being suspended to protect public health.
From California to Nebraska to Washington, D.C., activists have been left scrambling. With businesses shuttering and governments asking residents to stay at home and avoid close contact with one another, signature collection efforts have been suspended for ballot initiative campaigns to amend reform state marijuana laws, legalize psilocybin mushrooms and decriminalize psychedelics. Several campaigns are asking officials to allow online signature collection.
In New York, plans to legalize cannabis through the budget appears to have been derailed as the state prioritizes a coronavirus response.