Every facet of the economy has felt the impact of the novel coronavirus (COVID-19) but one industry was specifically left out of the relief bill: cannabis.
Congress passed a bill to implement the Payment Protection Program, a federally funded program that the Small Business Administration would offer what are initially loans to companies to cover eight weeks of salary, benefits, and other staff costs. Lobbyists took to the Capitol on behalf of the cannabis industry, which is facing the same crisis that everyone else is. But lawmakers declined to include cannabis in the bill this time.
There is reason to hope, however, as another bill is already in the works to increase relief funding. Federal lobbyists for cannabis are finally on the same page about an issue and have been collaborating to push for cannabis’s inclusion in relief funding. As a growing billion-dollar industry, it makes fiscal sense to offer the same protection that other industries can receive.
If cannabis companies continue to be left out of the relief funding, it will be the small mom-and-pop businesses that go under first. It will also mean layoffs at bigger companies as well, putting more people on government unemployment. How can an industry that many states have deemed “essential” continue to be left out of relief efforts? Lobbyists are hopeful that the next bill will be more favorable for the cannabis industry.
Cannabis lobbyists have also been pushing for a clarification of rules for financial institutions to work with cannabis companies. The Secure and Fair Enforcement (SAFE) Banking Act has been on the books since last year and it made significant progress in Congress, the furthest any bill of its kind had gone before. The House of Representatives passed the SAFE Banking Act, but the Senate had allowed it to sit in committee. The bill would clarify the rules for banking, which would clear the way for many cannabis companies to get bank accounts, loans, and credit card processing services.
One cannabis company has managed to qualify for Paycheck Protection Program loans. New Age Beverages Corp. is a CBD company that reported on April 15 to the Securities and Exchange Commission that it had received a nearly $7 million loan from the Paycheck Protection Program with a 1% interest rate. Most companies are bracing for the worst, however, and aren’t expecting help from the federal government. If it did become available, however, operators would not shy away from applying.
Many operators are having to try out new things, such as drive-up services and socially distant employees, but the COVID-19 pandemic has largely exposed the weaknesses that were already present in the system. The quasi-legal state is at a point where reform will be necessary to move forward. Continuing to treat cannabis as a special subclass doesn’t make sense from an economic standpoint.
How do you think the U.S. government or the state governments has been doing to help the cannabis industry during the pandemic? Let us know the impacts you’ve seen in the comments below.