Pot Trade Orgs Push To Be Included In Future COVID-19 Relief

By Sam Reisman
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Law360 (April 28, 2020, 9:54 PM EDT) -- A coalition of cannabis trade organizations on Tuesday urged congressional leaders to include the state-legal cannabis industry in future federal coronavirus relief packages, calling the Small Business Administration's policy of exclusion "inequitable."

Principals from the American Trade Association for Cannabis and Hemp and the Policy Center for Public Health and Safety in a letter called for lawmakers to find a legislative solution to correct the SBA's move to bar cannabis and ancillary businesses from disaster loans, calling it administrative overreach.

"The decision to bar the legal cannabis industry from these relief programs not only harms the longevity of the industry but also the hardworking Americans who rely on the industry for their livelihood," according to the letter.

The organizations noted that the agency's policy of barring the industry from accessing any of the $2 trillion relief package was at odds with the decision made by multiple governors to designate the cannabis industry as "essential."

"Cannabis companies are good corporate citizens and readily participate in pandemic-related measures to care for their workforce such as mandatory paid sick leave and working to care for those with the virus," the letter said. "Yet, these companies do not have any of the emergency federal protections currently being offered."

The letter proposed that Congress amend the Coronavirus Aid, Relief and Economic Security, or CARES, Act, to explicitly allow state-legal cannabis companies to access loans, tax credits and other assistance.

Another legislative solution the letter proposed was for Congress to authorized block grants for each state to dole out at their discretion based on their individual needs, allowing states that have legalized cannabis to direct it to that part of their economy.

The letter, which was co-signed by 24 state cannabis trade organizations and four financial institutions that service the industry, comes on the heels of multiple similar calls for lawmakers to make allowances for the cannabis industry in future federal economic relief packages.

Earlier this month, the International Cannabis Bar Association petitioned congressional leaders to ensure that lawyers and other professionals who service the state-legal cannabis industry are able to access the economic relief offered to small businesses under the coronavirus rescue package.

The SBA's decision to designate those who work with cannabis companies as "indirect marijuana businesses," and therefore ineligible for loans under the CARES Act, was overly broad and untenably vague, the ICBA said.

"The number of businesses in this so-called 'Indirect' economy is many times over the size of the 'Direct' cannabis market, and this guidance will undoubtedly cause substantial and lasting economic harm to the small business communities across the country and frustrate the stated purpose of the CARES Act," the ICBA's letter said.

On April 17, a bipartisan group of 34 representatives similarly 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.

"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.

--Additional reporting by Sarah Jarvis. Editing by Alanna Weissman.

For a reprint of this article, please contact reprints@law360.com.

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