The state-legal cannabis industry has for years been operating at a disadvantage because of the categorization of cannabis as a controlled substance on the federal level. Although most states with legal cannabis markets deemed the controversial plant essential during the coronavirus pandemic, thus allowing companies in the cannabis space to continue their operations, federal law remains a major thorn in the side of cannabis businesses.
Despite providing hundreds of thousands of job opportunities and contributing millions of dollars in much-needed tax revenue to state coffers, these companies remain locked out of federal aid that would have helped them weather the greatest health and economic crisis in a decade.
However, businesses in the cannabis space are now one step closer to accessing federal financial aid after three new bills that would remove restrictions barring them from federal financial aid programs were introduced in the U.S. House of Representatives. If these bills pass, small businesses in the cannabis space will be eligible for a variety of federal services, including disaster relief, grant programs and loans. Save for a couple of small changes, the three legislations bear a striking similarity to bills introduced in 2019.
The Ensuring Safe Capital Access for All Small Businesses Act of 2021, which was sponsored by House Small Business Committee Chairwoman Nydia Velázquez, would grant businesses in the cannabis sector access to the resources from the federal Small Business Administration (“SBA”).
The SBA would be barred from preventing such businesses from accessing disaster assistance, including microloans as well as its new loan guarantee program. The bill also has provisions that prevent private lenders and SBA intermediaries, as well as state and local development companies, from refusing to work with businesses simply because they are in the cannabis space.
The second legislation, bill H.R.2649, would establish and task a U.S. Small Business Administration (“SBA”) grant program with providing funding to state and local authorities to support the often complicated licensing process for cannabis businesses. Language from the legislation explicitly states that this grant money is to be invested in communities that were disproportionately affected by the failed war on drugs. The bill, which was initially introduced by Rep. Dwight Evans, also removes cannabis from the federal controlled Substances Act.
H.R. 2652, the third legislation, was introduced by Rep. Jared Golden. If this third bill passes, it will prohibit SBA partners that offer guidance and training services from refusing to help businesses that are in the cannabis space or are involved with cannabis businesses. As the country works to recover from the financial crisis brought on by the coronavirus pandemic, Golden says, giving small businesses access to the resources and services they need to grow is crucial.
If these bills are approved and enacted, they could be a great help to many cannabis sector players, such as Grapefruit USA Inc. (OTCQB: GPFT), which would appreciate being treated by the federal authorities in the same way that businesses in other industries are regarded and supported when need arises.
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