Top Politicians Push For Cannabis Businesses To Have The Ability To Federal Loans
Federal Loans Should Be Made Available To Marijuana Businesses
Marijuana Businesses Deserve Access To SBA Loans
A collection of 10 senators recently forwarded a letter to Appropriations Committee leadership. This was done requesting that literature allowing marijuana businesses to access loans. As well as other help through the federal Small Business Administration to be included in an upcoming spending bill report.
In the letter, Sen. Jacky Rosen explains the unique financial obstacles that state-legal cannabis companies face. Especially while marijuana is still federally against the law. The senators mentioned freeing up SBA loans and disaster assistance for the industry is especially needed. Mainly because the funds “would fill gaps left by the private sector and help mitigate the effects of the COVID-19 pandemic.”
Based on that, the legislators—consist of Sens. Bernie Sanders (I-VT) and Cory Booker (submitted the request for a policy change. Which was sent to the leaders of the Senate Appropriations Committee and the Appropriations Financial Services. As well as the General Government (FSGG) Subcommittee back in late June. They particularly requested that language be added to the fiscal year 2022 FSGG spending bill report. This would need to be done to ensure SBA is authorized to dispense loans to cannabis businesses.
The report should call on SBA to stop “denying loan applications for the 7(a) Loan Guarantee Program, Disaster Assistance Program, Microloan Program, and 504/Certified Development Company Loan Program to legally operating cannabis small businesses in states that have legalized cannabis sale and use,” the letter says.
“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,” it explains. “Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA programs and participating in or doing business with a rapidly-growing and legal industry.”
The Next Step For Cannabis Businesses Get Financial Assistance
The letter also transcribes that while there has been a “clear shift in public opinion supporting legalization of cannabis in the United States”. Numerous marijuana businesses still run on a mainly cash-only base. This is because most financial institutions are not willing to take on clients that go against any current federal laws.
“We strongly support SBA making all of its loan programs available to all state-legal cannabis small businesses,” the lawmakers wrote. “We, therefore, ask the Subcommittee on Financial Services and General Government to include language in your forthcoming legislation to help extend SBA loan programs to cannabis small businesses legally operating in states that allow the sale and use of cannabis for medical or recreational purposes.”
The letter’s other signatories are Sens. Jeff Merkley, Maria Cantwell, Ed Markey, Ron Wyden, Bob Menendez. In addition to Alex Padilla, and Raphael Warnock. This is a follow-up to a prior conversation that has really heated up among the coronavirus pandemic.
Earlier in 2021, Rosen pushed the then-nominee for SBA administrator, Isabella Guzman, on helping cannabis firms access assistance from the agency. The since-confirmed official simply committed to “further understanding those rules and regulations” and working with the senator’s office.
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Final Thoughts On SBA Loans For Marijuana Businesses
SBA confirmed back in 2020, just as the coronavirus spread out across the country, that state-legal cannabis businesses are ineligible for federal disaster relief loans. Now, these same loans were offered to other small businesses. The agency went even further to say that the loans are also off-limits to businesses that indirectly serve the marijuana industry.
Rosen, Wyden, and other legislators later composed a letter to Senate leadership in April of last year. Lawmakers debated that the cannabis industry deserved equal access to federal relief. By the end of that month, supportive legislators in Congress had introduced a proposal to extend access to coronavirus relief funds. Mostly in regards to state-legal cannabis businesses, but the measure did not come to a vote.
Then in September, wildfires on the west coast impacted the marijuana growing community heavily. For example, regulators in Oregon mentioned 20 percent of cannabis businesses in the state had been encouraged to evacuate. However, SBA executives said cannabis operators could not apply for disaster relief loans.
This was due to marijuana currently being federally illegal. With this, the agency has praised its commitment to support companies in the newly legal hemp industry. Also, it has urged the U.S. Department of Agriculture to make its laws on the crop more advantageous to small businesses.