Lawmakers, Lobbyists Urge Congress to Consider Coronavirus Relief For Cannabis Companies
Cannabis advocates are pushing for marijuana businesses to be included in the next round of federal coronavirus relief.
Over the last week, several lawmakers and lobbyists have penned letters to state and federal officials urging them to extend aid to cannabis businesses as part of a phase four stimulus package.
On Friday, a bipartisan group of House members sent a letter to House Speaker Nancy Pelosi (D-CA) and House Minority Leader Kevin McCarthy (R-CA) asking them to “address one of the shortcomings” of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law by President Donald Trump last month.
Under that historic stimulus package, cannabis companies were unable to access billions of dollars in loans because marijuana is still considered illegal under federal law.
In their letter, 34 members of the U.S. House of Representatives -- led by Earl Blumenauer (D-OR), Barbara Lee (D-CA), Don Young (R-AK), and Tom McClintock (R-CA) -- pleaded with Pelosi and McCarthy to include cannabis companies in the next stimulus package.
“State-legal cannabis businesses need access to CARES Act programs to ensure they have the financial capacity to undertake the public health and worker-focused measures experts are urging businesses to take,” the letter reads.
While millions of businesses throughout the country have applied for U.S. Small Business Administration (SBA) loans via the Paycheck Protection Program (PPP) -- which is out of funds -- and the Economic Injury Disaster Loan (EDIL)-COVID-19 plan, cannabis firms have been sitting on the sidelines.
Currently, both plant-touching and adjacent cannabis businesses are unable to access SBA funding. Legal hemp businesses, however, are able to access federal funding because the 2018 Farm Bill removed hemp from the legal definition of marijuana.
“Like other businesses with continued operations, cannabis businesses have met the moment by preserving access to treatment for patients with chronic conditions, donating protective clothing, and manufacturing equipment for medical use,” the lawmakers wrote. “However, unlike other small businesses, cannabis businesses are not eligible for the CARES Act programs.”
Today’s letter comes about one week after six cannabis industry trade groups wrote to state governors and treasurers asking for their help securing federal aid.
“Please speak to your congressional delegation about including a provision in the next COVID-19 legislative relief package that would make state-legal cannabis businesses eligible for SBA assistance,” the groups wrote last Wednesday.
That letter -- signed by the Cannabis Trade Federation, Global Alliance for Cannabis Commerce, Marijuana Policy Project, Minority Cannabis Business Association, National Cannabis Industry Association and National Cannabis Roundtable -- also urged state leaders to create their own lending programs to help cannabis companies that do not qualify for PPP and EIDL relief.
“Those programs provide short-term liquidity to businesses and workers to assist with operating expenses, healthcare costs, paid sick leave, other benefits required under federal relief packages, and to help out with ensuring business continuity in the event of an economic disaster,” they wrote.
Cannabis companies have been deemed “essential” businesses in most adult-use markets (except Massachusetts), a point both lawmakers and lobbyists alike have leaned on.
“Like all essential businesses, cannabis businesses are facing significant uncertainty and costs to provide for our employees and to maintain the medical supply chain during this pandemic,” the trade groups wrote last week. “Yet, unlike every other essential business, there is an underlying federal-state tension which puts our businesses in a uniquely vulnerable and dire operational and financial position.”
For their part, the members of Congress who wrote to Pelosi and McCarthy also highlighted the 240,000 workers employed by cannabis companies in 33 states and four U.S. territories, as well as the $1.9 billion in state and local taxes that were generated in 2019.
"Workers at state-legal cannabis businesses are no different from workers at any other small business -- they show up to work every day, perform their duties, and most importantly, work to provide for their families," they wrote. "This lack of access will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers of cannabis businesses who need support the most."
The United Food and Commercial Workers International Union (UFCW), which represents grocery, healthcare and cannabis industry workers, also sent a letter to SBA Administrator Jovita Carranz saying her agency should issue loans to marijuana businesses that operate in legal markets.
“The SBA should not treat legal and state licensed cannabis related businesses (CRBs) any different from other businesses seeking the same type of loan,” UFCW international president Marc Perrone wrote, adding that dispensary workers are at risk of being exposed to the coronavirus because the industry deals mostly in cash.
Meanwhile, Rep. Ed Perlmutter (D-CO), a lead sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, which would protect financial institutions working with state-approved cannabis companies, is reportedly pushing to include language from the bill in the next coronavirus stimulus package.