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House Bill Aims to Make Cannabis Businesses Eligible for COVID-19 Relief

April 24, 2020 by Dan McCue
Budtenders, wearing a protective mask and gloves, prepare orders for customers to pick-up at The Higher Path cannabis dispensary in the Sherman Oaks section of Los Angeles. (AP Photo/Richard Vogel)

WASHINGTON – A bill introduced by two Democratic congressmen Thursday would make businesses in the previously flourishing cannabis industry eligible to apply for COVID-19 relief programs run through the Small Business Administration.

In the wake of the shuttering of many businesses in mid-March, eight of the 11 states where adult use of marijuana is legal, designated cannabis dispensaries as essential businesses, allowing them to stay open.

Sales at these shops have surged.

According to Cowen Inc., the independent investment bank and financial services company, weekly sales of marijuana in March topped $134 million in California, Washington, Nevada, and Colorado.

The firm said the month’s sales were a 17% increase from the weekly average a year ago. In the second half of March, the average purchase also increased by 46%.

But if all this makes a bad time sound like high times for the industry, Reps. Earl Blumenauer, D-Oregon, and Ed Perlmutter, D-Colo., say the impact of the coronavirus on cannabis businesses is far from uniform and many have had to change their business models to adapt to the new reality.

For instance, like other essential retailers, many cannabis businesses have had to adjust their retail store operations to abide by social distancing recommendations and have found their ability to serve their customers curtailed.

In response, Maryland, Michigan, and Illinois have enacted curbside pickup rules for the businesses, while Massachusetts has expanded delivery areas for approved dispensaries and recommended patients who can afford it, buy their full two week supply of two and a half ounces at a time, rather than making multiple trips.

Despite this, Aaron Smith, executive director of the National Cannabis Industry Association, said many cannabis businesses are suffering along with the rest of us.

Cannabis businesses that have remained open have had to contend with supply chain disruptions, lack of access to banking services, and the costs incurred by implementing additional health and safety measures to protect employees and customers.

“The cannabis industry employs nearly a quarter of a million Americans and has been deemed essential in state after state, yet many businesses will not survive the pandemic without help,” Smith said in a written statement.

“They already face disproportionate financial burdens during normal conditions, and the strains created by the coronavirus response are putting them at an even greater disadvantage and jeopardizing their ability to provide vital health care services. We are incredibly grateful for the dozens of lawmakers who are urging their colleagues to give cannabis businesses fair access to federal relief funds in these difficult times.”

“As Congress seeks to provide relief to small businesses across America, chief among those being left out are state-legal cannabis businesses that are essential to communities and have met the demands of this crisis,” said Blumenauer, founder and co-chair of the Congressional Cannabis Caucus.

The representatives’ bill would grant state-legal cannabis businesses eligibility for the Paycheck Protection Program, Economic Injury Disaster Loans, and Economic Injury Disaster Loans emergency advances.

“We should include state-legal cannabis in federal COVID-19 reponse efforts. Without providing these businesses the relief needed to carry out the recommended public health and worker-focused measures, we are putting these hard-working people – and ourselves – at risk,” Blumenauer said.

“Cannabis businesses are major employers and significant contributors to local economies in Colorado and across the country,” agreed Perlmutter. “They should receive the same level of support as other legal, legitimate businesses and be eligible for SBA relief funds during this COVID-19 crisis.”

Last week, Blumenauer and Reps. Barbara Lee, D-Calif., Don Young, R-Alaska, and Tom McClintock, R-Calif., led 34 House members in writing to the House leadership calling for cannabis businesses to be included in all future COVID-19 relief bills.

“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,” the lawmakers said. 

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