The American cannabis industry has broken just about every rule of economics. Unlike many other businesses, they cannot easily get access to credit, bank securities, or insurance, as cannabis remains illegal federally. Unlike many other businesses, however, they've also been declared an essential business by state officials, allowing them to remain open for business during the COVID-19 pandemic while so many others close down. Yet they face a major new threat on the horizon, as financial aid for the pandemic may not be able to reach them before their operations suffer.
The federal Small Business Administration (SBA) has put up a barrage of policies to disincentivize marijuana dispensary businesses, policies that until now failed to overcome the huge demand from consumers for legal cannabis. Without SBA go-ahead, however, dispensaries that would otherwise be eligible for financial aid like the Economic Injury Disaster Loan (EIDL, a program specifically set up to provide emergency financing to small businesses) are now shut out. Attempts by lawmakers in Washington D.C. to pass a bill that would legalize funding for marijuana dispensaries faces a major uphill campaign to get approval.
The Republican-controlled Senate has been unfriendly to many marijuana policy reforms that made it through the House. Experts recommended that the House pass emergency funding measures in the broader coronavirus relief bill, but urgency and political unpopularity meant that these businesses were left behind as the bill made it through Congress. Now, individual lawmakers from cannabis-legal states, particularly Colorado and Oregon, are arguing against the tide of prevailing political opinion to call for direct aid in the Emergency Cannabis Small Business Health and Safety Act. House Democrats are working to provide new SBA protections that would include cannabis companies, but there is no guarantee of success.
On paper, cannabis dispensaries should be the prime target for financial aid. The vast majority are small businesses with just a few dozen employees, often family-run; they should be able to apply for the Paycheck Protection Program (PPP) as well as receive $10,000 from the EIDL. The PPP, signed by President Trump, earmarked some $350 billion to ensure that small businesses can continue providing pay for their employees during the pandemic, yet none of it has come to dispensaries because of their federal status. Each dispensary relies on a number of professionals to get their operations up and off the ground: attorneys and accountants who provide professional services to marijuana dispensaries have also found themselves ineligible for financial aid.
The greatest irony of all is that the federal government has received billions of dollars of tax revenue from marijuana dispensaries, and now cannot be bothered to secure the livelihood of thousands of Americans who depend on this business to pay their bills. The cannabis industry is now valued at over ten billion dollars, making it more valuable than the NFL. Yet it now requires a huge amount of money for payroll, paid employee leave, supplies, and the basic cost of their building's rent.
Cannabis dispensaries and grow-ops that find themselves in serious jeopardy do have several options available to them, however. Canna Business Financing is one of the few lending services in the country that provides financial services specifically to marijuana dispensaries and owners. In the event that you own or work at a dispensary and find yourself unable to meet your financial obligations, Canna Business can provide lines of credit and loans that will help your organization to make it through the next pay period without worry.
While some cannabis businesses are able to stay afloat due to customer spending, many others need a helping hand, and Canna Business Financing can make sure you get the relief you need at this crucial moment in history. Get Pre-Approved today.
Posted by Canna Business TeamFacebook
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