America’s cannabis industry exists in a sort of limbo. Although dozens of states now allow the cultivation and sale of cannabis to adults aged 21 and older, federal law still outlaws the plant and considers it a Schedule I controlled drug.
This means that even though licensed cannabis businesses are seen as legal commercial enterprises by many states, they cannot access many of the services other industries enjoy. One such service is benefits and grants from the federal government. Cannabis businesses felt this most acutely during the coronavirus pandemic when the national government deployed aid funds to businesses through the federal Small Business Administration (SBA) loans program, but federal law prevented the cannabis companies from accessing much-needed funds.
Senator Jacky Rosen is now requesting that marijuana businesses be granted access to SBA loans as well as other federal resources via an impending spending bill. A persistent supporter of the cannabis industry’s right to access SBA resources without any restrictions, the senator sent a letter to the Senate Appropriations Committee. She requested that language preventing the SBA from denying small cannabis businesses federal loans be added to the Financial Services and General Government Related Agencies Appropriations Bill for fiscal year 2023.
This language would allow state-legal cannabis businesses to access loans from the Disaster Assistance Program, Microloan Program, Loan Guarantee Program and the 504/Certified Development Company Loan Program. The letter also requests that state-legal cannabis businesses be allowed to participate in the Small Business Administration’s entrepreneurial development programs.
The Nevada senator noted that states are now seeing billions of dollars’ worth of cannabis sales and the numbers are expected to rise as even more states move to legalize either recreational or medical cannabis in 2022.
But despite the fact that the cannabis businesses pay billions of dollars in taxes, SBA policy currently excludes businesses that directly or indirectly deal with cannabis from its entrepreneurial development and loan programs. This locks out cannabis businesses as well as enterprises outside the industry that choose to take advantage of the extremely profitable cannabis industry.
Rosen also raised the issue last year during a Senate Small Business and Entrepreneurship Committee hearing during which SBA administrator Isabel Guzman said she would look into granting cannabis businesses access to SBA loans.
Last July, Rosen and nine other senators penned a letter to the leadership of the Senate Appropriations Committee requesting that marijuana businesses be allowed to access federal Small Business Administration loans.
If access to this funding is granted, the sector would grow more steadily and more companies as well as individuals may be interested in giving advanced cultivation equipment such as the grow containers made by Advanced Container Technologies Inc. (OTC: ACTX) and similar companies a try.
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