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July 9, 2021
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This story originally appeared on Marijuana Stocks
Marijuana Businesses Deserve Access to SBA Loans
A group of 10 senators recently sent a letter to the leadership of the Appropriations Committee. This was done by requesting that the literature allowing marijuana businesses to access loans. As well as other aid through the Federal Small Business Administration to be included in a future report on the spending bill.
In the letter, Senator Jacky Rosen explains the unique financial barriers that cannabis businesses are confronted. Especially when marijuana is still illegal at the federal level. Senators mentioned that the release of SBA loans and disaster assistance for the industry are particularly needed. Mainly because the funds would “fill in the gaps left by the private sector and help mitigate the effects of the COVID-19 pandemic”.
On this basis, the legislators consist of Sens. Bernie Sanders (I-VT) and Cory Booker (submitted the request for policy change. That was sent to the heads of the Senate Committee on Credit and Financial Services Credit. As well as the General Government Subcommittee (FSGG) in late June. In particular, they called for wording to be added to the report on the FSGG’s spending bill for fiscal year 2022. This should be done to ensure that the SBA is allowed to provide loans to companies in cannabis.
The report is expected to call on the SBA to stop “denying loan applications for the 7 (a) loan guarantee program, disaster assistance program, microcredit program, and 504 / Certified Development loan program. Company to small cannabis businesses operating legally in states that have legalized cannabis sale and use, ”the letter reads.
“Current SBA policy excludes small businesses with ‘direct’ or ‘indirect’ products or services that facilitate the use, growth, improvement, or other development of cannabis from SBA-supported funding,” explains he does. “Therefore, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA programs and participating in or doing business with a legal and rapidly growing industry.”
The Next Step for Cannabis Companies to Get Financial Aid
The letter also transcribes that if there has been a “clear shift in public opinion in favor of the legalization of cannabis in the United States.” Many marijuana businesses still operate on a primarily cash basis. In fact, most financial institutions are unwilling to accept clients who go against the federal laws in force.
“We strongly support the SBA by making all of its loan programs available to all small, legal cannabis businesses,” the lawmakers wrote. “We are therefore asking the Financial Services and General Government Subcommittee to include language in your future legislation to help extend SBA loan programs to small cannabis businesses operating legally in states that allow the sale and distribution of cannabis. use of cannabis for medical or recreational purposes. “
The other signatories of the letter are Sens. Jeff Merkley, Maria Cantwell, Ed Markey, Ron Wyden, Bob Menendez. In addition to Alex Padilla and Raphael Warnock. This is a sequel to an earlier conversation that really heated up amid the coronavirus pandemic.
Earlier in 2021, Rosen pushed for Isabella Guzman, then a SBA director candidate, to help cannabis companies access agency help. The official confirmed since has simply committed to “better understand these rules and regulations” and to work with the senator’s office.
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Final thoughts on SBA loans for marijuana businesses
The SBA confirmed in 2020, just as the coronavirus spread across the country, that legal cannabis companies are not eligible for federal disaster relief loans. Now those same loans were available to other small businesses. The agency even went further, claiming that lending is also prohibited to companies that indirectly serve the marijuana industry.
Rosen, Wyden and other lawmakers later drafted a letter to Senate leaders in April of last year. Lawmakers have debated whether the cannabis industry deserves equal access to federal relief. By the end of this month, pro-congressional lawmakers had tabled a proposal to expand access to coronavirus relief funds. Mainly with regard to legal cannabis businesses, but the measure was not voted on.
Then in September, wildfires on the west coast hit the marijuana growing community hard. For example, regulators in Oregon mentioned that 20% of the state’s cannabis companies had been encouraged to evacuate. However, SBA executives said cannabis operators could not apply for disaster relief loans.
This was due to the fact that marijuana was currently illegal at the federal level. With this, the agency hailed its commitment to supporting businesses in the new legal hemp industry. In addition, he urged the US Department of Agriculture to make its growing laws more beneficial for small businesses.