At the Corner of Main Street and High
During the COVID-19 pandemic, “ganja-preneurs” are reaching out to elected officials for help.
A coalition of marijuana industry associations sent a letter to U.S. governors and state treasurers on Wednesday, requesting their assistance in obtaining financial relief that marijuana businesses are being denied by the federal government amid the coronavirus pandemic.
The letter emphasizes that marijuana companies (most of them small in size) are keeping thousands of people employed, despite the virus-induced slump in overall employment. That’s largely because many states and localities have deemed marijuana companies essential services.
Cannabis dispensaries are providing recreational and medical marijuana for consumers around the country during the coronavirus crisis, causing a surge in pot sales despite the recessionary contraction for a wide swath of other industries.
Congress last month passed the CARE Act, a $2.2 trillion fiscal spending package that provides a lifeline to families and businesses most affected by the coronavirus. Business leaders argue that more needs to be done.
The White House asked Congress on Wednesday for an additional $250 billion in emergency economic aid for small U.S. businesses clobbered by the outbreak. A Senate vote on the proposal is expected Thursday.
Despite all this, the cannabis industry is specifically ineligible for federal disaster loans and other relief programs because of marijuana’s continuing status as an illegal controlled substance on the federal level. The groups said the treasurers could provide assistance in that regard.
The letter states:
“Like all essential businesses, cannabis businesses are facing significant uncertainty and costs to provide for our employees and to maintain the medical supply chain during this pandemic. Yet, unlike every other essential business, there is an underlying federal-state tension which puts our businesses in a uniquely vulnerable and dire operational and financial position. This is particularly true of our small and minority-owned businesses.”
Seeking access to SBA help…
The letter asks state officials to encourage congressional delegations to insert language into future COVID-19 legislation that would allow marijuana companies to access federal Small Business Administration (SBA) relief loans and disaster assistance. The letter also asks these officials to consider creating state-level lending programs for the industry. The letter goes on to assert:
“Although cannabis businesses operate in strict compliance with state law and comply with a broad range of federal mandates, including paying federal corporate taxes at a much higher effective rate than other businesses due to a quirk in the tax code, their activity is still considered illegal under federal law. This creates all kinds of hardship, including this current prohibition on SBA assistance.”
The National Cannabis Industry Association, Marijuana Policy Project, Minority Cannabis Industry Association, Cannabis Trade Federation, National Cannabis Roundtable and Global Alliance for Cannabis Commerce each signed the letter.
Friends in high places…
Amid the coronavirus outbreak, an increasing number of states are allowing marijuana dispensaries to stay open as providers of essential services, even as huge numbers of businesses are forced to shut their doors.
Here’s a roundup of the states and jurisdictions that have allowed marijuana businesses to remain open as essential service providers:
Although scores of dispensaries have reported a surge in pot sales during the coronavirus pandemic, their business practices have been greatly affected by the pandemic. The virus has caused considerable supply chain and regulatory uncertainty and altered the way pot shops interact with customers.
Accordingly, other industries are lobbying Congress to help canna-business, notably banking. In a reversal of their previous resistance to marijuana normalization, banking associations from 49 states and Puerto Rico sent a letter on March 6 to the chairman and ranking member of the Senate Banking Committee, asking them to advance a bill protecting financial institutions that lend money to state-legal marijuana companies.
As the number of jobs in canna-business grows, politicians are more likely to push for legalization. Marijuana is becoming entrenched as a mainstream business, with more and more families across the country depending on Mary Jane for a paycheck. And politicians are getting addicted to the state and local tax revenue, too.
Cannabis News Roundup
In COVID-related news this week, as it affects cannabis:
Delaware regulators are allowing medical cannabis delivery services for the first time because of the coronavirus pandemic.
Illinois regulators reiterated their extension of curbside medical cannabis sales through April 30, deeming the product an essential service.
Maryland regulators are allowing doctors to issue medical cannabis recommendations via telehealth during the coronavirus pandemic. Medical cannabis growers, processors and dispensaries are exempt from an order Gov. Larry Hogan (R) issued to close non-essential businesses.
Massachusetts Gov. Charlie Baker (R) is being sued by a coalition of marijuana companies over his decision to shutter recreational marijuana stores amid the coronavirus outbreak. As the above chart shows, medical marijuana shops can remain open for business in the Bay State.
Minnesota Gov. Tim Walz (D) issued an extended coronavirus stay-at-home order that exempts medical cannabis businesses and cannabidiol (CBD) oil shops as essential. Minnesota’s action underscores how CBD is becoming a mainstream consumer product increasingly found on retail shelves.
Oregon regulators are allowing marijuana businesses to accept expired in-state driver licenses or identification cards during the coronavirus outbreak.
Here’s the most exciting news: The recent correction in marijuana stock prices has put several appealing pot stocks on the bargain shelf. For our team’s latest research on the most profitable marijuana investments, click here.
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John Persinos is the editor-in-chief of Marijuana Investing Daily.