Small Marijuana Businesses Ineligible For Federal Coronavirus Loans

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Small Marijuana Businesses Ineligible For Federal Coronavirus Loans
Congress and the president are pushing financial assistance for small businesses amid the pandemic, but marijuana businesses aren't eligible.
SHOW TRANSCRIPT

"They're going to need some loans. They're going to need things. And we're going to be able to take care of them because we don't want those small businesses to go out of business," President Donald Trump said during a Fox News virtual town hall. 

President Trump has said one of his top priorities during the coronavirus pandemic is to help small businesses that are struggling to stay afloat by offering disaster relief loans through the Small Business Administration. 

But cannabis businesses won't be eligible for federal assistance because the federal government considers them illegal. 

Thirty-four states allow for marijuana sales for medicinal use, and 11 for recreational purposes.

Carol Chastang, a spokeswoman for the SBA, told Newsy: "The SBA does not provide financial assistance to businesses that are illegal under federal law. Businesses that aren't eligible include marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law." 

Lisa Conine manages Om of Medicine, a small medical and recreational marijuana dispensary in Ann Arbor, Michigan. 

She says her dispensary is still open despite a "shelter in place" order in Michigan because the state considers medical marijuana dispensaries essential businesses.

Cannabis businesses can't access the banking system and are taxed at higher rates than other businesses because weed is still federally illegal. Conine says these challenges coupled with the instability of an ongoing pandemic could hurt her business.

"Uncertainty with the financial challenges that this industry was already facing, and then not knowing how long this is going to last. Not knowing if people are going to drop off and not come in as much or order as much. ... It would be obviously devastating if we weren't able to access that type of service when we're in need. And it's looking like that might be the case,' Conine said.

Cannabis industry leaders say marijuana businesses should get the same treatment as other businesses that are struggling during the coronavirus crisis. 

"It's absolutely important that we at least say something about this now, because cannabis businesses not only face a much steeper financial burdens than any other businesses, but they are primarily small and mid-sized businesses and are going to need a lot of assistance just like every other business," said Morgan Fox, media relations manager for the National Cannabis Industry Association. 

For now, Conine says she's looking to her state and local officials and is hopeful that lawmakers will step in to help cannabis businesses. 

"If we don't have the assistance to get through this time, then we're missing out on an entire new industry that has the opportunity to bring in so much tax revenue for not only state governments, but federal governments as well. So I don't think it's a wise time to let this fail when we're just getting started," Conine said.