Marijuana Moment is a wire service assembled by Tom Angell, a marijuana legalization activist and journalist covering marijuana reform nationwide. The views expressed by Angell or Marijuana Moment are neither endorsed by the Globe nor do they reflect the Globe’s views on any subject area.
US Senator Ed Markey joined with 10 other senators to send a letter to leadership in a key committee asking that they add a provision allowing marijuana businesses to access federal loan services in an upcoming annual spending bill.
In the letter, led by US Senator Jacky Rosen, the lawmakers told the Appropriations Committee that it should “include report language prohibiting the Small Business Administration (SBA) from denying loan applications” to cannabis firms as part of the fiscal year 2021 spending bill for Financial Services and General Government and Related Agencies.
“Over the last decade, there has been a clear shift in public opinion toward supporting the legalization of cannabis in the United States,” the letter states.
While the number of legal marijuana states continues to grow, and those jurisdictions continue to collect millions of dollars in tax revenue, SBA policy prohibits participation in their programs by companies that directly or indirectly “aid the use, growth, enhancement, or other development of cannabis” by providing marijuana products or services.
“Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with a rapidly-growing and legal industry,” the senators wrote. “The SBA’s loan programs provide financial assistance in the form of loans and loan guarantees to small businesses who cannot easily access capital, which disproportionally impacts minority entrepreneurs.”
SBA services that marijuana companies should be eligible for include the Loan Guarantee Program, Disaster Assistance Program, and Microloan Program, the group said.
The letter also notes that “most banks are reluctant to serve cannabis businesses due to conflicts with federal law, meaning that these businesses often are forced to operate using purely cash, creating an unsafe operation.”
“SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector. Access to these SBA loan programs could ensure that small businesses — especially those led by our minority, women, and veteran entrepreneurs — can raise money for their ventures and support job creation. We strongly support ensuring that SBA loan programs are made available to all cannabis small businesses.”
Senators Ron Wyden, Tammy Duckworth, Michael Bennet, Kirsten Gillibrand, Bernie Sanders, Cory Booker, Bob Menendez, Jeff Merkley, and Kamala Harris also signed the letter.
In recent days, advocates have stepped up the push to include provisions for marijuana businesses in an upcoming fourth round of coronavirus relief legislation.
SBA did confirm last week that cannabis companies do not qualify for disaster relief loans amid the coronavirus pandemic. At the same time, the agency has touted its work in support of hemp businesses following that crop’s legalization through the 2018 Farm Bill.
It remains to be seen whether any lawmakers will take up the industry’s call to insert language providing for marijuana industry relief in the next COVID-related stimulus bill.