Economic Relief for Cannabis Businesses Absent from Latest COVID Package

Thursday, 14 May 2020

Washington, DC: A newly proposed House-backed COVID relief measure, the Health and Economic Recovery Omnibus Emergency Solutions Act (aka the ''HEROES Act"), does not include language amending eligibility requirements for state-licensed cannabis businesses.

The proposal, introduced on Tuesday, keeps in place existing prohibitions barring marijuana-related businesses from applying for Small Business Administration (SBA) assistance, such as low interest loans. NORML, along with various other advocacy groups, had advocated for SBA reform language to be included in the measure.

By contrast, provisions were included in the bill prohibiting the SBA from denying assistance to an applicant solely because he or she possesses a past criminal record. Separate provisions in the measure permits banks and other financial institutions to work directly with state-legal marijuana businesses. In September, members of the House voted 321 to 103 in favor of similar language (The SAFE Banking Act).

NORML's Political Director Justin Strekal criticized the House's failure to include more comprehensive SBA reform language in the bill. "The inclusion of the SAFE Banking Act in the CARES 2 package is a positive development, but one that's akin to applying a Band Aid to a gaping wound," he said. "In the majority of states, these cannabis businesses have been deemed essential during this pandemic. But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees."

He added: "While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus. By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space."

It has been estimated that 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.

For more information, contact Justin Strekal, NORML Political Director.