Eleven US Senators — Michael Bennett (D-CO), Cory Booker (D-NJ), Tammy Duckworth (D-IL), Kirsten Gillibrand (D-NY), Kamala Harris (D-CA), Edward Markey (D-MA), Robert Menendez (D-NJ), Jeffrey Merkley (D-OR), Jacky Rosen (D-NV), Bernie Sanders (I/D-VT) and Ron Wyden (D-OR) — have sent a letter to leadership urging lawmakers to permit licensed cannabis operators to qualify for loans and other forms economic assistance available from the Small Business Administration (SBA).
The Senators write:
Over the last decade, there has been a clear shift in public opinion toward supporting the legalization of cannabis in the United States. Some states, including Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington, have legalized both the recreational and medicinal use of cannabis. States collected an estimated $1.3 billion in tax revenue from legal cannabis sales in 2018. However, SBA’s current policy excludes small businesses with “direct” or “indirect” products or services that aid the use, growth, enhancement, or other development of cannabis from SBA-backed financing. Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with a rapidly-growing and legal industry.
Just two weeks ago, a representative from the Administration acknowledged, “With the exception of businesses that produce or sell hemp and hemp-derived products (Agriculture Improvement Act of 2018, Public Law 115-334), marijuana-related businesses are not eligible for SBA-funded services.”
The Senators close their letter stating, “We strongly support ensuring that SBA loan programs are made available to all cannabis small businesses.”
While the letter specifically calls for these changes to be made as part of the traditional appropriations process, which will not be concluded until September 2020 at earliest, one additional pathway would be to include legislative language in the next anticipated bill to address the COVID-19 pandemic. In this time of crisis and unprecedented federal support for the economy, with hundreds of billions of dollars being issued through the SBA to support small businesses, time is of the essence. To that end, NORML has called for SBA access to be included in our recently issued policy memo.
Prior to the COVID-19 pandemic, NORML has been working with its Congressional allies to move forward several pieces of legislation, such as HR 3540: The Ensuring Safe Capital Access for All Small Businesses Act, and HR 3884/S 2227: The Marijuana Opportunity, Reinvestment, and Expungement Act – which would both “prohibit the Small Business Administration from declining to provide certain small business loans to an eligible entity solely because it is a cannabis-related legitimate business or service provider.”
The state-licensed cannabis industry employs more than 240,000 American workers, over four times the number of American workers as does the coal industry. The majority of these businesses are small-to-medium in size.
Additional information about HR 3540: The Ensuring Safe Capital Access for All Small Businesses Act is available online here.