Congress’ Coronavirus Bailout Screws Cannabis Companies

Even in these desperate times, one industry is being left out of Uncle Sam’s grab bag of goodies: Cannabis companies of all stripes.

capitol building during the day Source: iStock

The US Senate made history Wednesday evening for passing a $2 Trillion stimulus package that politicians of all stripes are selling as an essential economic antidote to the coronavirus social distancing that’s left small, medium and large businesses shuttered from coast to coast.

But even in these desperate times, one industry is being left out of Uncle Sam’s grab bag of goodies: Cannabis firms of all stripes.

Continue Reading Below
Continue Reading Below

Even as many local officials spent much of March scrambling to overhaul state laws so they could provide for the tens of thousands of Americans employed in the marijuana industry (let alone to provide for their millions of customers), under the leadership of Majority Leader Mitch McConnell the US Senate decided to cut one of the nation’s fastest-growing sectors completely out of the largest economic aid package ever passed in America.

While combatting this rapidly spreading Coronavirus remains concern number one, marijuana advocates fear many dispensaries, growers and the countless other businesses that are directly tied to the nation’s booming pot industry are being forgotten by Washington’s political class.

Continue Reading Below

“The cannabis stuff is also dire,” a senior Democratic House aide told Wikileaf on background as the bill was still being tweaked behind closed doors in the Senate.

Continue Reading Below

The legislation includes $350 billion for the Small Business Administration (SBA) to quickly loan out to struggling companies. While Rep. Barbara Lee (D-Calif.) has introduced legislation that would allow the SBA to loan to cannabis companies, the agency doesn’t currently offer marijuana firms the assistance they offer other businesses.

Continue Reading Below

The SBA doesn’t loan to cannabis firms because weed is still classified as a Schedule 1 narcotic at the federal level, which pot proponents say is disgraceful even in good times.

“[McConnell] knows that this is an issue. This is something that we’ve been pushing through backchannels over on the Senate side,” according to the House aide. “It seems pretty bleak.”

Continue Reading Below
Continue Reading Below

The massive package also has another $500 billion for Treasury Department Secretary Steven Mnuchin to dole out at basically his own discretion, which is why critics are dubbing it a “slush fund” for Trump and his handpicked allies in the administration. But the fund doesn’t look to be slushy enough for marijuana businesses to benefit from even a splash of its taxpayer-funded largesse.

“Trying to figure out how we can give money to states and then have the money to states be as flexible as possible [is difficult],” the aide continued.  

Continue Reading Below

And marijuana advocates report that money won’t be available to companies tied to the cannabis industry in the 11 states and the District of Columbia that have legalized recreational marijuana, let alone the 33 that legalized medicinal marijuana.  

Continue Reading Below

“We’re not aware of any benefits for cannabis businesses in this bill,” a senior Democratic Senate aide told Wikileaf.

Continue Reading Below

Cannabis employees still eligible for federal assistance

There’s at least one bright spot though. While cannabis businesses themselves aren’t able to benefit from a rapid infusion of federal assistance in the midst of this global pandemic, employees at those firms are eligible for unemployment benefits under the bill.

But that’s viewed as a huge win, because even a few days ago cannabis advocates were scrambling to figure out if those employees would receive federal assistance in light of the fact that they’re still viewed as felons by many in the Trump administration.

Continue Reading Below
Continue Reading Below

“We’ve never chartered this territory, because federal law discriminates against the cannabis industry,” Justin Strekal, Political Director for the National Organization for the Reform of Marijuana Laws (NORML), told Wikileaf. “And if it’s federal dollars shoring up state funds, does the transfer of that money then transfer the legal definitions tied to that money in a weird way?”

Pot proponents on Capitol Hill won that round. Still, most states are more strapped for cash than leaders could have imagined just a month ago, which is complicating options for local officials scrambling to prop up these cannabusinesses that are now as much a part of their local economies as liquor stores and pubs. That means a gloomy, even depressing, outcome for even those states represented by pro-cannabis officials.

Continue Reading Below

“Unfortunately, I think that, realistically, state budgets are going to be so decimated by the sudden drop off in business and income revenue that even with the federal help, it is going to be a squeeze even to maintain existing services, let alone add on new programs,” the Senate aide continued.

Continue Reading Below

COVID-19’s financial effects sweep across the cannabis industry

The full scope of the Tsunami-like waves slowly moving through the industry from coast to coast aren’t known yet, but the wreckage is starting to become more visible by the day and week.

Continue Reading Below

The National Cannabis Industry Association had to cancel its previously scheduled May lobbying days in Washington – an annual ritual that of late has turned more than 300 everyday Americans tied to the marijuana industry into lobbyists as they storm Capitol Hill, meeting with hundreds and hundreds of the nation’s elected officials. For now, at least, it’s been rescheduled for the fall.

The National Cannabis Festival also has fallen victim to COVID-19. The nation’s premiere marijuana fest – an annual music, booze and bud party in the nation’s capital – was supposed to take place next month, but it’s now been postponed until September 19th.  

Continue Reading Below
Continue Reading Below

But even as marijuana firms – large, medium and mom and pop – have been left reeling from this economic shutdown, the nation’s political class in Washington still doesn’t seem to view them as the multi-billion-dollar industry they are.

This is the third stimulus package Congress has taken up in recent weeks, and it’s not expected to be the last. So even before the US House of Representatives officially passes this $2 Trillion stimulus package (which is expected on Friday), aides are already looking ahead to the next one and pot-proponents are demanding some federal love for their state’s burgeoning marijuana companies.  

Continue Reading Below

“We are working on trying to get something in a fourth package that would make legal cannabis businesses eligible for some of these benefits and newly created programs,” the Senate aid continued.  

Congress’ Coronavirus Bailout Screws Cannabis Companies was last modified: by