Ineligible for Stimulus Relief Due to Federally Illegal Status, The Cannabis Industry Looks to SAFE Banking Act For Hope

Massachusetts’ marijuana sales were up to a whopping $157 million before dispensaries were forced to restrict recreational sales, now providing their services to medical consumers only. This move by Massachusetts, as well as other states, has proven to be a hindrance to the industry’s opportunity of being a titan during this time of economic upheaval.

Though sales are still high in many areas of the States, “COVID-19 has made this a difficult time for all Americans, and the cannabis industry is not immune,” Michael Correia, director of government relations for the National Cannabis Industry Association, told Marijiuana Moment. “The inability for both direct and indirect cannabis businesses to access any relief funds from the Small Business Administration is unacceptable, especially when the majority of states have deemed them to be essential.”

Due to the continued Schedule I Status of Cannabis in the US, states where it was legal before coronavirus hit are eligible to participate in next to none of the federal relief programs the government is deploying to keep other essential businesses from tanking. 

Tax law also prohibits businesses involved with cannabis from deducting business expenses.

The Small Business Association has turned its back to legal cannabis businesses for now, standing firm in its position that “because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to the businesses that are illegal under federal law.” SAFE The Safe Banking Act – Secure and Fair Enforcement Act (HR 1595 / S. 1200) would allow state-licensed marijuana-related businesses to engage freely in relationships with banks and other financial institutions.

Small banks would be more apt to assist businesses with making ends meet. In the meantime, some cannabis firms have already begun to start up credit card companies of their own.

“With the majority of states now allowing for some form of recreational or medical marijuana, we have reached a tipping point on this issue and it’s time for Congress to act. Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels.:

Members of leading trade associations, Governors, and the Senate have been stressing the importance of allowing for aid to be dispersed among legal cannabis businesses. 

Representative Earl Blumenauer was among the eleven senators who sent letters to members of the Appropriations Committee last week, the chorus of voices calling out for a separate annual spending legislation to address the SBA.

“Given the unprecedented government intervention in the economy to mitigate the spread of COVID-19 and the harm on businesses, it is crucial that workers and small businesses in the cannabis industry receive the same protections and resources,” said Justin Strekal, political director of NORML. “It’s downright cruel that a majority of states have designated the marijuana industry as ‘essential’ yet deny them access to desperately needed support”