America’s cannabis industry may be one of the fastest-growing industries in the country, but players in the sector often have to deal with a variety of limitations due to federal prohibitions. For instance, cannabis businesses are largely unable to access financial services even though they generate billions of dollars in taxes.
The industry is also wholly excluded from financial assistance from the federal government because cannabis trade is considered illegal at the federal level. As a result, businesses in the sector were unable to access federal financial assistance during the coronavirus pandemic even though cannabis was deemed an essential product in several states.
In early 2020 when the pandemic was swiftly picking up steam, the Small Business Administration (SBA) announced that cannabis businesses would not be eligible for financial assistance under the federal program. However, that may soon change if a recently introduced bill advances past the legislature and is signed into law. Last week Senator Jacky Rosen introduced a bill that would allow businesses in the state-legal marijuana sector to finally access certain loans and services from the Small Business Administration.
Rosen’s proposal would bar the SBA from denying cannabis businesses access to loans and services such as technical assistance, disaster relief and microloans. She said that limiting their access to basic federal resources and support is unfair and is hurting the country’s state-legal cannabis sector.
Even though businesses in the marijuana space are subject to the same taxes other industries pay, they have been unfairly locked out of federal assistance. Additionally, given that a decent amount of cannabis businesses are owned by minorities, veterans and women, locking them out of SBA loans and services has a negative impact on overall social equity goals.
Rosen’s Fair Access for Cannabis Small Businesses Act seeks to address this issue while the cannabis industry is still in its infancy. The legislation would include an amendment to the Small Business Act that would prevent the SBA from denying services and loans solely because the borrower runs a state-sanctioned marijuana business or adjacent service. It would also entitle cannabis businesses to “assistance from resource partners” as well as service providers such as women’s business centers, veteran business outreach centers and small business development centers.
In a recent press release, U.S. Cannabis Council CEO Khadijah Tribble said that without access to financial services such as SBA loans, entrepreneurs from Black and Brown communities that were ravaged by the war on drugs may not be able to profit from the industry that was once used to stigmatize them but is now worth billions.
Cannabis industry actors such as Prime Harvest Inc. are likely to track how this bill progresses because its success would be another success notched by advocates who wish to end marijuana prohibition in all its manifestations.
NOTE TO INVESTORS: The latest news and updates relating to Prime Harvest Inc. are available in the company’s newsroom at https://cnw.fm/PRIME
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