Eleven Democratic U.S. senators are calling on the Small Business Administration to open up loans and other financial assistance to state-legal cannabis companies. The letter asks the agency to make cannabusinesses eligible for relief being offered to businesses throughout the county that are impacted by the coronavirus fallout.
“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.” — U.S. Senators in the letter
The letter says that the SBA loans would be “especially helpful to cannabis small businesses because they would fill gaps” left by financial institutions who the senators describe as “reluctant” to serve the industry due to federal cannabis prohibition.
“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 says.
The signatories include Senators Michael Bennet (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).
The letter is addressed to Senate Appropriations Committee Chairman Richard Shelby (R-AL) and Vice Chair Patrick Leahy (D-VT), and Financial Services and General Government Financial Services Chairman John Kennedy (R-LA) and Vice-Chair Chris Coons (D-DE).
Under the CARES Act passed earlier this week, state-compliant hemp businesses can access funds available under the stimulus package but cannabis companies are not eligible.
Do you work for a cannabis brand? Take our 5-minute survey to help us report on the industry: Click Here