Senator Harris, Colleagues Call On Congressional Leaders To Ensure Cannabis Small Businesses Can Access Emergency SBA Loan & Grant Programs

DISTRICT OF COLUMBIA: U.S. Senator Kamala D. Harris (D-CA) on Wednesday joined Senators Jacky Rosen (D-NV) and Ron Wyden (D-OR), and 7 of their Senate colleagues in sending a letter to Congressional leadership calling for forthcoming COVID-19 relief legislative packages to allow state-legal cannabis small businesses and indirect cannabis small businesses to access loan and emergency grant programs administered by the U.S. Small Business Administration (SBA).

In the letter, the Senators highlight the failings of current regulations that exclude small businesses with “direct” or “indirect” products or services that aid the use, growth, enhancement, or other development of cannabis from SBA-backed financing, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). These outdated regulations have left taxpaying, state-legal cannabis small businesses behind during this crisis.

“The cannabis industry supports more than 240,000 workers in the United States, spanning 33 states and the District of Columbia. Some of these jobs have already been lost due to the COVID-19 pandemic and the resulting economic crisis, and there is significant risk of greater job loss in the coming months. Many cannabis businesses are small-to-medium size operators, and some have been ordered to close to comply with state public health safety measures without having access to the same support systems in place as other small businesses in different sectors,” wrote the Senators.

“Given the nature of the global COVID-19 pandemic, we must ensure that every American small business has the capacity to protect the health and economic wellbeing of their community and workforce. Therefore, we ask Senate Leadership to include in any future relief package provisions to allow state-legal cannabis small businesses and the small businesses who work with this industry to access the critical SBA support they need during these challenging and unprecedented times,” concluded the Senators.

In addition to Harris, Rosen, and Wyden, the letter was signed by Senators Catherine Cortez Masto (D-NV), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Bernie Sanders (D-VT), Ed Markey (D-MA), Elizabeth Warren (D-MA), and Michael Bennet (D-CO).

The full text of the letter can be found here and below:

Dear Majority Leader McConnell and Leader Schumer:

Thank you for your ongoing efforts to address the needs of the American people during the COVID-19 crisis. We write to ask that forthcoming COVID-19 relief legislation allow state-legal cannabis small businesses and indirect marijuana small businesses to access emergency loan and grant programs administered by the U.S. Small Business Administration (SBA). Access to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program will allow these small businesses to keep their workers on payroll and prevent further job losses that are devastating the economy. The coronavirus crisis demands relief for all workers and businesses, no matter the sector.

The cannabis industry supports more than 240,000 workers in the United States, spanning 33 states and the District of Columbia. Some of these jobs have already been lost due to the COVID-19 pandemic and the resulting economic crisis, and there is significant risk of greater job loss in the coming months. Many cannabis businesses are small-to-medium size operators, and some have been ordered to close to comply with state public health safety measures without having access to the same support systems in place as other small businesses in different sectors.

SBA’s current regulations exclude small businesses with “direct” or “indirect” products or services that aid the use, growth, enhancement, or other development of cannabis from SBA-backed financing, including PPP and EIDL. Consequently, small business owners in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with or in a rapidly-growing and legal industry.

Workers at state-legal cannabis small 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. This lack of access to SBA assistance for cannabis small businesses will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers who need support the most. The COVID-19 outbreak is no time to permit outdated federal policy to stand in the way of the reality that state-legal cannabis small businesses are sources of economic growth and financial stability for thousands of workers and families.

Given the nature of the global COVID-19 pandemic, we must ensure that every American small business has the capacity to protect the health and economic wellbeing of their community and workforce. Therefore, we ask Senate Leadership to include in any future relief package provisions to allow state-legal cannabis small businesses and the small businesses who work with this industry to access the critical SBA support they need during these challenging and unprecedented times.

Thank you for your consideration of this request.

Sincerely,

Wyden, Merkley Call For SBA To Accept Loan Application From Cannabis Business In Cannabis-Legal States

Oregon senators: “SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector.”

DISTRICT OF COLUMBIA: U.S. Sens. Ron Wyden and Jeff Merkley today announced they are requesting that the Small Business Administration (SBA) be prohibited from denying loan applications to cannabis small businesses in states like Oregon that have legalized cannabis use.

In the Oregon lawmakers’ letter to Senate colleagues overseeing SBA appropriations, they urged language prohibiting the SBA loan denials to cannabis businesses by noting the clear shift in public opinion toward supporting legal cannabis and the tax revenues these businesses generate for states.

“States collected an estimated $1.3 billion in tax revenue from legal cannabis sales in 2018,” Wyden and Merkley wrote. “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.”

The SBA’s loan programs provide financial assistance in the form of loans and loan guarantees to small businesses who cannot easily access capital, a problem disproportionally faced by minority entrepreneurs.

“Currently, most banks are reluctant to serve cannabis businesses due to conflicts with federal law, meaning that these businesses often are forced to operate using purely cash, creating an unsafe operation,” the senators wrote. “SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector. Access to these SBA loan programs could ensure that small businesses – especially those led by our minority, women, and veteran entrepreneurs – can raise money for their ventures and support job creation.”

The letter comes in addition to legislation sponsored by Wyden and Merkley that would make cannabis businesses eligible for SBA assistance, forbid Small Business Development Centers and Women’s Business Centers from declining to serve those businesses, establish the Cannabis Opportunity Program for SBA microloans and provide grants to minimize barriers for under-represented groups to participate in cannabis businesses.

In addition to Wyden and Merkley, other co-signers of the letter led by U.S. Sen. Jacky Rosen (D-NV) include U.S. Sens. Tammy Duckworth (D-IL), Michael F. Bennet (D-CO), Kirsten Gillibrand (D-NY), Bernard Sanders (I-VT), Edward J. Markey (D-MA), Cory A. Booker (D-NJ), Robert Menendez (D-NJ) and Kamala D. Harris (D-CA).

A copy of the entire letter is here.