Support Cannabis Companies During Lockdown

There’s a lot of hope among small businesses that help from the Small Business Administration (SBA) will help them get through this tough time.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for a Paycheck Protection Program for companies with 500 or fewer employees. It will offer a significant amount of forgivable loans to these businesses.

Good news, for sure.

The problem is, “Businesses Engaged in any Illegal Activity” are ineligible for this help. Cannabis companies fall into that category. And dispensaries could hit pretty hard.

That’s why it’s important to support cannabis companies during lockdown.

Feel Secure in Curbside Pickup

Folks still want their marijuana. Dispensaries and retailers want to be able to provide it for them. And they certainly don’t want to shutter.

In these times of social distancing, of course you want to feel safe and avoid the further spread of this virus. But you may be feeling disinclined to go out and get recreational marijuana.

Keep this mind though. With curbside pickup, you’re not only going to be able to get cannabis without contact, but you’ll be supporting dispensaries who really need the income right now.

And it’s not just dispensaries feeling the burn.

Businesses That Service the Cannabis Industry Stand to Suffer

That’s right.

It’s not just growers and dispensaries that are feeling the burn. Ancillary firms that contribute to them with products or services are also excluded from receiving benefits.

The SBA has a rather extensive list that includes, “businesses that provide testing services, or sell or install grow lights, hydroponic or other specialized equipment, to one or more Direct Marijuana Businesses; and businesses that advise or counsel Direct Marijuana Businesses on the specific legal, financial/accounting, policy, regulatory or other issues associated with establishing, promoting, or operating a Direct Marijuana Business.”

So despite the fact that all of these state-legal marijuana companies are permitted to operate, the federal government who still deems marijuana as an illicit drug has no intention of stepping in to help right now.

The Irony Is Disturbing

On some level, it comes as no big surprise that businesses such as dispensaries and cultivation facilities that deal directly with marijuana would be excluded.

But an indirect marijuana business that derived any of its gross revenue from the previous year – or any startup that projects to derive any of its gross income for the upcoming year – from sales to direct marijuana businesses may also lose out on the benefits.

The exception is companies that provide general services such as plumbing, electric, or tech support. But that means a multitude of companies such as law firms, accounting firms, advertising and marketing firms, HVAC companies, lighting companies, etc. could be deemed ineligible.

And these companies pay Social Security and Medicare taxes, unemployment taxes, and federal corporate taxes. When it comes to emergency loans, they deserve to be treated like any other business.

Help Is on the Way…?

Dealing with the repercussions of COVID-19 is tough enough without having to be subjected to this.

At this stage of the game, advocates are pushing for Congress to add language to future coronavirus-related spending legislation that would free up access to SBA services for all state-legal marijuana businesses.

Whether that happens remains to be seen.

But eleven senators did recently send a letter to a key committee asking that they add a provision that allows marijuana businesses to access federal loan services in an upcoming annual spending bill.

So there’s that.