A congressional committee will hold a hearing next week to discuss opportunities for small businesses and entrepreneurs from disadvantaged communities in the burgeoning marijuana industry and the challenges the state-legal market faces.
The announcement from the House Small Business Committee was posted on Wednesday. The hearing, titled “Unlocked Potential? Small Businesses in the Cannabis Industry,” will take place on June 19, according to the notice.
Though cannabis remains illegal at the federal level, the committee underscored the enormous economic potential of the market as more states opt to legalize marijuana and regulate its sale.
“The hearing will focus on the opportunities the legitimate cannabis industry presents for small businesses in states with legal cannabis, as well as entrepreneurs from traditionally underserved communities,” the notice states.
Members will also get the chance to learn about how the unique challenges that small cannabis businesses—as well as ancillary businesses that aren’t directly involved in marijuana production or distribution—face under the current regulatory model.
There’s a growing interest among lawmakers in providing basic financial resources to cannabis businesses that are operating in compliance with state law.
Leadership on the Small Business Committee sent a letter to the head of the federal Small Business Administration (SBA) on Wednesday, outlining their concerns about existing policies that bar marijuana businesses as well as those that are indirectly involved in the industry from accessing capital and other resources that the administration offers.
— House Committee on Small Business (@HouseSmallBiz) June 12, 2019
The exclusion of “Indirect Marijuana Businesses” from these services “carries with it potentially severe unintended consequences for America’s small business sector,” they wrote.
“As increasingly more states legalize marijuana and Congress, states, and regulators continue recognizing the legitimacy of the industry, it will be important for Congress and the agencies it oversees to work cooperatively to further ease policies on Direct and Indirect Marijuana Businesses where appropriate. We therefore look forward to working with you to find solutions that will minimize burdens and maximize access to capital for small businesses looking to engage in this emerging industry.”
Last month, Sen. Jacky Rosen (D-NV) also questioned a member of the SBA during a committee hearing about whether existing federal laws are inhibiting the growth of the marijuana industry and whether small cannabis businesses and entrepreneurs stand to benefit from gaining access to SBA resources.
Nevada’s cannabis industry cannot thrive without access to financial services. At yesterday’s @SmallBizCmte hearing, I asked what steps @SBAgov is taking to break down regulatory barriers for our nation’s legal marijuana businesses to ensure they can continue to grow. pic.twitter.com/lyfXGwpoRf
— Senator Jacky Rosen (@SenJackyRosen) May 24, 2019
Those resources include everything from financing programs that give businesses access to capital to low-cost training for individuals interested in starting a business.
The SBA official said at the time that the administration hadn’t studied the matter due to federal prohibition.
But the Small Business Committee apparently isn’t letting the issue fall to the wayside. Members will hear testimony from stakeholders including the Minority Cannabis Business Association’s Shanita Penny, Eric Goepel of the Veterans Cannabis Coalition and Dana Chaves, who is an executive at First Federal Bank and also chairs the National Cannabis Industry Association’s (NCIA) Banking Access Committee.
“Access to SBA funds would be a lifeline for small businesses and startups in the cannabis industry, particularly those in marginalized communities that have been most impacted by prohibition,” Morgan Fox, media relations director for NCIA, told Marijuana Moment.
“It is a great sign of where federal policy is heading that the Committee on Small Business is exploring these issues and is concerned with the viability of smaller operators in the cannabis space, as well as ensuring equitable access to the industry,” he said.
Read the full letter the the Small Business Committee sent to SBA below:
Photo courtesy of Philip Steffan.