/Cannabis Businesses Are Ineligible for Federal Coronavirus Relief

Cannabis Businesses Are Ineligible for Federal Coronavirus Relief

The US Senate has just agreed on a 2 trillion dollar stimulus package to help boost the economy during the coronavirus quarantine, but as usual, state-legal cannabis businesses are being left out of the picture.

On Monday, Greg Hubly, the owner of a small weed business in Washington State, asked the Small Business Association (SBA) whether cannabis companies would be eligible for federal relief packages. The Pacific NW chapter of the SBA responded that “with the exception of businesses that produce or sell hemp and hemp-derived products… marijuana-related businesses are not eligible for SBA-funded services.”

Hubly was not surprised by the agency’s response. Cannabis plants containing more than 0.3 percent THC are still classified as marijuana, a Schedule I drug, and federal law prohibits any business that handles a controlled substance from receiving any sort of federal aid. Hemp, on the other hand, was made federally legal by the 2018 Farm Bill, and hemp businesses are therefore eligible for government coronavirus relief programs.

“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,” said Carol Chastang, a spokesperson for the SBA, to 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.”

Several cannabis industry trade groups, including the Minority Cannabis Business Association, the National Cannabis Industry Association, the National Cannabis Roundtable, and the Cannabis Trade Federation, wrote a joint letter to Congress urging lawmakers to offer state-legal weed businesses the same protections that every other business is eligible for.

“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,” said the letter, according to Marijuana Moment. “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.”

Even before the current pandemic, some cannabis-friendly lawmakers proposed bills that would make state-legal weed businesses eligible for SBA loans and assistance. But, like the vast majority of past marijuana-related legislation, these measures have failed to advance in Congress. NORML is also urging lawmakers to offer assistance to cannabis industry workers, but again, Congress has a dismal track record when it comes to supporting the legal weed industry.

The one saving grace of the current situation is that most states have decided that cannabis retailers are “essential businesses,” and are allowing legal weed stores to stay open when other businesses have been forced to close. When states began announcing quarantine measures last week, residents of adult-use states began stocking up on legal weed products, initially causing sales to spike, but sales have declined since then.