Despite the fact that pot is probably putting more than its share of the nation’s psychological wellbeing on its back, the federal government doesn’t seem to be willing to offer legal weed an equal measure of support. The Small Business Association stated last week via Twitter that cannabis businesses will remain ineligible to receive any of the $50 billion in low-interest disaster relief loans that the president promised the agency would distribute.
“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,” SBA’s Carol Chastang told Cannabis Business Times. “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.”
The problem boils down to the fact that while cannabis is recreationally legal in 11 states, D.C., and two territories, it remains federally illegal, which already inhibits basic business conduct like banking and interstate trade. Now, federal prohibition will also affect the business's ability to receive emergency aid from the government.
Beyond the fact that it’s easier to stay inside for, uh, an indefinite amount of time if you’re baked as much as possible, local governments have recognized that right now, access to weed is also about medical necessity. Dispensaries with medicinal licenses in states like California, New Jersey, Massachusetts, New Mexico, New York, and Washington have been designated as essential businesses. According to a report from CBS News, some doctors have even begun to prescribe medicinal cannabis via telemedicine.
For now, at least, many cannabis businesses are likely still in the green. Street dealers around the world have already reported an uptick in demand, according to MEL Magazine, and legal operations in the U.S. saw the same pre-sheltering boom, per the New York Times.
But while a lack of federal support won’t mean the death of legal cannabis everywhere (these ghouls wish!), cannabis businesses that aren’t bloated with venture capital and helmed by the likes of John Boehner would likely suffer disproportionately. That could have serious implications for diversity in the cannabis industry in the long term, with a higher bar of entry into the legal pot biz meaning fewer opportunities for potential businesses run by people who aren’t already independently wealthy.
According to Marijuana Moment, cannabis trade groups have urged the government to extend some kind of relief to struggling small cannabusinesses still required to comply with COVID-19 closures and distancing regulations. “We are not seeking special treatment for state-legal cannabis businesses. We only seek to have them treated on an equal level as all other job-generating, tax-paying companies in this country,” industry leaders wrote in a letter sent to Congress.
As of 2019, the cannabis industry created more than 200,000 jobs, according to a report from Leafly. With no mandated government assistance in sight, however, it feels unlikely that the same upward trend will continue.
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