44 House And Senate Members Are Calling For Cannabis Business To Gain Access To Forthcoming COVID-19 SBA Funding

44 House And Senate Members Are Calling For Cannabis Business To Gain Access To Forthcoming COVID-19 SBA Funding

Thu, 04/23/2020 - 16:10
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Ten senators today joined 34 members of the U.S. House in calling for the ability of the nation’s cannabis companies in states that are “legal” (for medical or adult use or both) to access any upcoming Small Business Administration (SBA) relief funds during the current COVID-19 pandemic.

“The cannabis industry supports more than 240,000 workers in the United States, spanning 33 states and the District of Columbia,” the senators wrote in their letter dated April 22 letter. The letter was addressed to Senate Majority leader Mitch McConnell, R-Kentucky, and Senate Minority Leader Chuck Schumer, D-New York.

House members signed a similar letter last week. “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,” the senators’ letter said.

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“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,” the senators’ letter continued.

The House members’ letter sent last Friday had a similar message: “The COVID-19 outbreak is no time to permit federal policy to stand in the way of the reality that millions of Americans in states across the country face daily,” the letter said. That reality is “that state-legal cannabis businesses are sources of economic growth and financial stability for thousands of workers and families, and need our support.”

According to a statement from the National Organization for the Reform of Marijuana Legislation (NORML), those 240,000 workers represent four times the number of American workers in the coal industry, which has a significant presence in Senate Leader McConnell’s home state of Kentucky.

Nevertheless, the SBA’s position has been consistent. “Because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to businesses that are illegal under federal law,” a SBA spokeswoman said in March, at the time of passage of an earlier small business disaster-assistance legislation in response to COVID. “Businesses that aren’t eligible include marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law,” she said.

At the federal level, hemp has been legal since the Agriculture Improvement Act of 2018,  but marijuana remains illegal under the Controlled Substances act.

Because of this exclusion, cannabis businesses were left out of the $480 billion aid package for small businesses, hospitals and testing passed by the Senate on Tuesday, on a voice vote. The House is expected to pass the legislation tomorrow.

Importantly, the letters calling for SBA access referred to forthcoming COVID-19 legislation, which is not unexpected but may be delayed: Congress is in recess right now, not scheduled to return until May 4, in order to reduce the possibility of coronavirus infection in the packed halls and meeting rooms of Washington.

Asked about the industry’s argument for access to SBA funding, Justin Strekal, political director of NORML, pointed, in an interview, to how, “Cannabis – its commerce – is regulated now in 34 states and the District of Columbia, and [how] the majority of those jurisdictions have deemed the industry as essential to the health and well-being during the time of the pandemic.

“Every regulated market, with the exception of the adult use market in Massachusetts,” Strekal said, “continues to be operational, and with the unprecedented steps that Congress has taken to provide support for small businesses – including the Paycheck Protection Program — as well as loans and grants to purchase PPE – the [cannabis] companies which are remaining open should be able to access those funds.”

The letters’ signers, who are politically bipartisan, are largely from states legal for at least medical cannabis. The House members leading that legislative body’s cannabis letter are Rep. Earl Blumenauer, D-Oregon, and Rep. Tom McClintock, R-California.

The ten senators are all from states legal for both medical and adult use, except for Sen. Kirsten Gillibrand, D-New York, whose state is legal only for medical sales. Leading the Senate effort are Sen. Jacky Rosen, D-Nevada, who serves on the Small Business Committee, and Sen. Ron Wyden, D-Oregon.

Senator Schumer’s office could not be reached for comment, though Strekel said Schumer had been “supportive” toward lifting cannabis’s prohibition in the past. Though McConnell has been a spirited champion of legal hemp, which is cultivated in his state, he is strongly opposed to what he calls hemp’s “illicit cousin,” marijuana. He had a photograph of himself taken as he accepted an honorary machete supposedly used to chop down what was described as thousands of marijuana plants.

Asked about the letters’ message and its chances for success, Strekel was noncommittal, referring only to the fast-moving events in Washington. “Honestly,” he said, “I didn’t think Congress would be spending an extra $4 billion this year two months ago, so political reality shifts pretty quickly.”