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Law360 (April 17, 2020, 5:01 PM EDT) -- A bipartisan group of 34 representatives on Friday urged House leadership to include state-legal cannabis businesses in the next coronavirus relief bill, saying a lack of access to federal loans will lead to unnecessary layoffs, pay cuts and furloughs for cannabis industry workers.
Reps. Earl Blumenauer, D-Ore., Barbara Lee, D-Calif., Don Young, R-Alaska — who co-chair the Congressional Cannabis Caucus — were joined by Rep. Tom McClintock, R-Calif., in leading the push for House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy to include cannabis companies as they draft the next COVID-19 relief bill.
"The COVID-19 outbreak is no time to permit federal policy to stand in the way of the reality that millions of Americans in states across the country face daily — that state-legal cannabis businesses are sources of economic growth and financial stability for thousands of workers and families, and need our support," the representatives said in their letter.
Calling the exclusion of cannabis businesses from the Coronavirus Aid, Relief and Economic Security Act a shortcoming, the lawmakers pointed out that cannabis businesses have been deemed "essential" — and therefore can remain open — in several states across the country. Yet they are not eligible for the $2 trillion coronavirus relief bill's programs, including loans from the Small Business Administration.
"Current SBA policies prevent cannabis businesses from accessing the Paycheck Protection Program (PPP), Emergency Economic Injury Disaster Loans (EIDLs), EIDL grants, or SBA loan forgiveness — programs intended to help businesses fight COVID-19 in safe and equitable ways," the lawmakers said.
Blumenauer said in a statement shared by his office that lawmakers can't be selective about which small businesses get relief while the pandemic "cripples our economy."
"This is yet another example of the federal government falling behind the states on cannabis," Blumenauer said. "While we continue our fight to reform this country's discriminatory, harmful, and out-of-touch cannabis policies, the fight for the state-legal cannabis industry, which employs hundreds of thousands of Americans, continues."
Lee said in a statement that excluding cannabis businesses from the same assistance given to other small businesses "is an attempt to deny 21st century reality."
"In many states, such as California, cannabis businesses have become a part of the economy and health care system," Lee said. "Just as thousands of people rely on cannabis to manage ongoing health issues, thousands of our neighbors rely on legal cannabis businesses for their livelihoods."
Young said in a statement that Alaska's cannabis businesses should have the same access as other industries to federal COVID-19 relief.
"One of the most troubling components of this is in many states, these employees are considered essential, but are not allowed to access the support created by the CARES Act," Young said. "We're in a pandemic, and we need to be making sure that outdated policy isn't endangering the livelihoods of our entrepreneurs and their hardworking employees."
McClintock wasn't immediately available to comment Friday.
In a letter Monday, International Cannabis Bar Association Executive Director Christopher Davis called the SBA's decision to designate service providers who work with the cannabis industry ineligible for loans under the coronavirus aid bill on the grounds that they are "indirect marijuana businesses" untenably vague and an example of administrative overreach.
California, Colorado, Illinois, Nevada and Washington are among the states to have deemed recreational marijuana shops essential businesses, while Michigan and Oregon have also set up guidelines to keep the shops open during the crisis.
A Massachusetts state judge on Thursday denied several marijuana businesses' request to reopen the state's recreational marijuana shops after Gov. Charlie Baker ordered them to close during the coronavirus pandemic, saying the governor's decision was rational enough to stand.
--Additional reporting by Sam Reisman. Editing by Daniel King.
For a reprint of this article, please contact reprints@law360.com.
