The livelihood of a quarter-million Americans working in the cannabis industry is hanging in the balance, and only an act of Congress could save the struggling industry during the COVID-19 pandemic. Despite being considered essential businesses in several states, cannabis businesses are excluded from coronavirus relief packages because the substance is still considered illegal by the federal government.
After the Trump Administration passed the CARES Act, which delivers $2.2 trillion to the economy, in large part to keep small companies afloat and employees paid, federal Small Business Administration (SBA) clarified that even legal marijuana businesses were ineligible to receive federal dollars. Going even further, even businesses that “indirectly” deal with marijuana, meaning any business obtaining revenue from activities connected to state-legal marijuana in the broadest sense, are also excluded from federal aid. That includes any business “that derived any of its gross revenue from sales to marijuana businesses of products or services that could reasonably be determined to aid in the use, growth, enhancement or other development of marijuana,” the SBA explains.
In other words, smoke shops that sell drug paraphernalia, laboratories that provide testing services, technical businesses selling or installing lights, hydroponic or any equipment that can be used by marijuana growers, as well as accountants, lawyers and advisers of any sort are all excluded from the CARES Act if they cooperated with a legal pot grower or retailer. However, the SBA clarifies, “a plumber who fixes a sink [...] or a tech support company that repairs a laptop for such a business” are considered removed enough from the illicit product to not be affected.
Other coronavirus relief bills have been passed by Congress since the CARES Act, including a $484 billion bill that cleared Congress unanimously on Thursday, April 23, bringing the total federal response to the pandemic to $2.8 trillion. But none of these initiatives include cannabis businesses.
Attempted Solutions
Rep. Earl Blumenauer and Rep. Ed Perlmutter, both Democrats spearheading cannabis reform in Congress, introduced the “Emergency Cannabis Small Business Health and Safety Act” in an attempt to include cannabis businesses in the relief effort. Its goal is simple: “A business shall not be ineligible for assistance on the basis that the business is a cannabis-related legitimate business or a service provider,” it reads, and it explicitly includes the paycheck protection program, disaster loans and grants.
The bill comes one week after Blumenauer led a coalition of 34 congresspeople to demand that the House leadership changes the language of the then-upcoming stimulus bill to include cannabis businesses.
“The COVID-19 crisis response demands the full participation of the American people, businesses and workforce. However, without relief, a very large population is left without the means to execute the required public health measures and continue to provide financially for their families,” Blumenauer said. “Cannabis businesses have met the moment by preserving access to treatment for patients with chronic conditions, donating protective clothing, and manufacturing equipment for medical use. However, unlike other small businesses, cannabis businesses are not eligible for the CARES Act programs.”
“Workers at state-legal cannabis businesses are no different from workers at any other small business—they show up to work every day, perform their duties, and most importantly, work to provide for their families,” Blumenauer continues. “This lack of access will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers of cannabis businesses who need support the most. 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—that state-legal cannabis businesses are sources of economic growth and financial stability for thousands of workers and families, and need our support.”
A similar initiative, led by senators Jacky Rosen and Ron Wyden and including a smaller number of senators, was sent to Majority Leader Mitch McConnell. The letter stresses the fact that many jobs have already been lost and many more could disappear if the SBA does not change its stance.
While some leaders, in particular House Speaker Nancy Pelosi, have spoken in favor of cannabis reform, pot has been left out of every coronavirus bill so far. Besides that, many marijuana reform efforts, such as grassroots movements and legislative move unrelated to COVID-19, had to be abandoned because of the pandemic. The industry’s hopes rely on the Emergency Cannabis Small Business Health and Safety Act to further the cause of legal marijuana despite the current crisis.
If you’re looking for more stories like this, sign up for our Cannabis Newsletter so you don’t miss any cannabis, hemp or CBD content.
