U.S. Senator Jacky Rosen (D-NV) presented the Fair Access for Cannabis Small Business Act, allowing legal cannabis enterprises to apply for Small Business Administration (SBA) loans. Because marijuana is a Schedule 1 substance and hence illegal under federal law, the SBA presently does not provide marijuana-related small businesses access to these programs.
Suppose the Fair Access for Cannabis Small Business Act gets signed into law by Congress and President Joe Biden. In that case, it will expand SBA programs to “legally operating cannabis enterprises” that are currently barred from receiving such federal help.
The senator’s proposal would prohibit the SBA from refusing businesses various loans and other services, such as disaster relief, microloans, and technical support, just because they operate in state-legal cannabis markets.
This second-class position was felt acutely during the worst months of the COVID-19 epidemic in 2020, when emergency payments and forgiven debts from the Paycheck Protection Program, which was provided to most U.S. owners, were unavailable to plant-touching enterprises. This gap harmed small businesses more than well-capitalized multistate corporations.
“The unfair barriers to basic federal support and resources have hurt our state’s legally-operating cannabis small businesses,” Rosen said to Marijuana Moment. “This legislation will level the playing field so that cannabis small businesses—including those owned by people of color, women, and veterans—have access to the same federal resources and loans that other legal businesses are entitled to.”
Rosen’s bill is one of several that will be considered during the next session of Congress, which concludes in December. While the most focus is on the SAFE Banking Act, which would work towards prohibiting federal banking regulators from being able to penalize financial institutions that provide banking services to legal cannabis operations, Congress last week sent Biden a marijuana research bill. Though some states provide social equity enterprises with startup funding or built-out facilities, supporters say that access to SBA loans would be a significant milestone and colossal boost to diversifying the marijuana market.
Senator Rosen’s groundbreaking legislation will promote equity and creativity in the cannabis market by leveling the playing field for independent cannabis operators. The Fair Access for Cannabis Small Businesses Act, combined with the SAFE Banking Act, would establish a regulatory framework to ensure a dynamic startup sector and diverse players.
Better Late Than Never
We’re always delighted to celebrate any successes in the cannabis market, but we can’t get beyond the reality that this should have started at the local license level and worked its way up the chain. It would have significantly impacted leveling the playing field early on when capitalized enterprises had a considerable edge.
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