As Congress scrambles to reach a consensus on how to help Americans caught in the financial fallout of COVID-19, a coalition of marijuana industry trade groups is urging federal lawmakers not to forget about the hundreds of thousands of workers in state-legal cannabis industries.
Legal marijuana now employs an estimated 240,000 people in the U.S. but, because cannabis remains federally illegal, marijuana businesses remain cut off from nearly all benefits at the federal level, including emergency relief funds.
In a letter sent Friday to leaders of the House and Senate, major cannabis industry associations called on lawmakers to remove those restriction and ensure that state-legal cannabis businesses can qualify for assistance.
“Our members follow strict regulations, create jobs, generate billions of dollars in tax revenue—including federal corporate tax revenue—and act as good corporate citizens,” the groups said. “Yet it appears as if these businesses will not be eligible for the same loans available to other businesses in this country at risk due to the global pandemic.”
The letter was sent jointly by the National Cannabis Industry Association, National Cannabis Roundtable, Minority Cannabis Business Association, Global Alliance for Cannabis Commerce and Cannabis Trade Federation.
“The ineligibility of cannabis businesses for disaster assistance loans is especially inequitable given that these same cannabis businesses are required to comply with other coronavirus-related measures, such as paid sick leave coverage,” the organizations wrote. “We are not seeking special treatment for state-legal cannabis businesses. We only seek to have them treated on an equal level as all other job-generating, tax-paying companies in this country.”
In a separate announcement on Friday, the nonprofit group NORML said in a blog post that the organization has been reaching out “to our numerous allies on Capitol Hill” to ensure that “discriminatory practices do not apply to those in the industry seeking unemployment benefits [for cannabis workers] during these uncertain times.”
“Given the tremendous amount of uncertainty in the broader economy,” NORML Political Director Justin Strekal said in a statement, “the hundreds of thousands of American workers who are employed by the state-legal marijuana industry must be respected and protected by the emergency actions being taken by elected officials.”
Cannabis Workers, Unemployment Insurance, and the Small Business Administration: What You Need to Know https://t.co/Tt2y2ovVHg
— NORML (@NORML) March 20, 2020
Programs already in place should extend at least some benefits to marijuana workers, NORML said in the post. In addition to workers qualifying for state-level unemployment benefits, the cannabis industry could see help from the congressional Families First Coronavirus Response Act.
The act, signed into law this week, directs federal funds to state governments to help with COVID-19 efforts. NORML said that after conferring with experts, it believes the act “provides the individual states with the authority to decide for themselves which industries are legally eligible to receive benefits.”
But unless lawmakers amend current rules, state-legal cannabis companies won’t receive a dime of disaster relief aid provided by the federal government to other small businesses. The federal Small Business Administration (SBA) is prohibited from providing financial assistance to industries that are illegal under federal law.
NORML said that it “will continue to work with our federal allies to call for an end for such discriminatory practices against the cannabis industry and those whose livelihoods depend upon it.”
One way to address the issue, NORML said, would be to pass pending legislation introduced last year by Rep. Nydia Velázquez (D-NY), who chairs the House Small Business Committee. The bill, H.R. 3540, would remove cannabis from the Controlled Substances Act and prohibit SBA from denying services to marijuana-related businesses.
That legislation was introduced just days after federal lawmakers heard about challenges facing small cannabis businesses at a hearing. Language from the bill was later included in the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, which was approved by the House Judiciary Committee last year.
“Now is not the time for Congress to think small,” Strekal, of NORML, urged as lawmakers continued debating how to best address the crisis. “Including Chairwoman Velazquez’s proposal to have the SBA support small cannabis businesses would protect both American jobs and the consumers that they serve.”
Meanwhile, the coronavirus pandemic is also impacting drug policy reform efforts across the country. Lawmakers in New York have said in recent days that the effort to legalize marijuana for adults may be delayed due to coronavirus. Ballot initiative campaigns in California and Washington, D.C., have asked local officials for permission to gather signatures online. And in Nebraska, activists pushing to legalize medical marijuana in the state have announced they’ve temporarily suspended their signature gathering campaign.
“We look forward to the opportunity to get back out there to help Nebraskans create meaningful change for each other,” Nebraskans for Medical Marijuana posted to Facebook on Thursday, “and we wish you and your loved ones health and peace of mind.”
Read the cannabis industry letter to congressional leaders below:
Illinois Gets More Tax Revenue From Marijuana Than Alcohol, State Says
Illinois took in more tax dollars from marijuana than alcohol for the first time last quarter, according to the state Department of Revenue.
From January to March, Illinois generated about $86,537,000 in adult-use marijuana tax revenue, compared to $72,281,000 from liquor sales.
Those following the cannabis market in Illinois might not be entirely surprised, as the state has consistently been reporting record-breaking sales, even amid the pandemic. In March alone, adults spent $109,149,355 on recreational cannabis products—the largest single month of sales since retailers opened shop.
It was in February that monthly cannabis revenues first overtook those from alcohol, a trend that continued into March.
If the trend keeps up, Illinois could see more than $1 billion in adult-use marijuana sales in 2021. Last year, the state sold about $670 million in cannabis and took in $205.4 million in tax revenue.
Officials have emphasized that the tax dollars from all of these sales are being put to good use. For example, the state announced in January that it is distributing $31.5 million in grants funded by marijuana tax dollars to communities that have been disproportionately impacted by the war on drugs.
The funds are part of the state’s Restore, Reinvest, and Renew (R3) program, which was established under Illinois’s adult-use cannabis legalization law. It requires 25 percent of marijuana tax dollars to be put in that fund and used to provide disadvantaged people with services such as legal aid, youth development, community reentry and financial support.
Awarding the new grant money is not all that Illinois is doing to promote social equity and repair the harms of cannabis criminalization. Gov. J.B. Pritzker (D) announced in December that his office had processed more than 500,000 expungements and pardons for people with low-level cannabis convictions on their records.
Relatedly, a state-funded initiative was recently established to help residents with marijuana convictions get legal aid and other services to have their records expunged.
But promoting social equity in the state’s cannabis industry hasn’t been smooth sailing. The state has faced criticism from advocates and lawsuits from marijuana business applicants who feel officials haven’t done enough to ensure diversity among business owners in the industry.
Colorado Marijuana Sales Reached $167 Million In February
Colorado’s overall cannabis sales for the first two months of 2021 are $78 million higher than those for January and February of 2020.
By Robert Davis, The Center Square
Total marijuana sales in Colorado reached $167 million in February, the state’s revenue department announced on Friday.
The total represents a $20 million decline in sales from the previous month. However, Colorado’s overall sales for the first two months of 2021 remain $78 million above the pace set between January and February of 2020.
Marijuana sales are calculated by adding the total sales for both medical and recreational marijuana sales in Colorado’s 64 counties.
Denver County led all others in total recreational sales with over $38 million. Arapahoe and Adams counties followed suit with $13 million and $11 million in recreational sales, respectively.
Denver also led the way in medical marijuana sales, bringing in a total of $14 million. El Paso County was a close second, reaping over $10 million in medical sales.
Sales are not automatically accounted for in the state’s accounting system. This means the Department of Revenue (CDOR) relies on each county to report their sales before reporting the total. In effect, marijuana sales are reported one month behind tax and fee revenue totals.
Meanwhile, Colorado collected over $33 million in tax revenue in March. This total represents both taxes levied from medical and recreational marijuana sales, as well as license and application fees.
Between February and March, state tax revenue from marijuana sales declined 4 percent, according to CDOR data.
Tax revenue comes from a 2.9 percent state sales tax on marijuana sold in stores, a 15 percent state retail marijuana sales tax, and a 15 percent state retail marijuana excise tax on wholesale sales or transfers of retail marijuana.
Uber Will ‘Absolutely’ Explore Marijuana Deliveries When Federal Prohibition Ends, CEO Says
The CEO of Uber said on Monday that the ride share company will “absolutely” explore adding marijuana deliveries to its services when federal prohibition ends.
Dara Khosrowshahi was asked about the prospect of expanding his business to include cannabis deliveries during an interview with CNBC. He said while the company remains focused on grocery and alcohol deliveries, in addition to its core ridesharing service, that’s certainly in the cards if marijuana is federally legalized.
Uber is interested in “the types of deliveries that a high percentage of consumers are going to want delivered fast into their home and are quite frequent,” he said. “We think, obviously, food, grocery, pharmacy and alcohol are part of that category,” but cannabis also holds potential.
“When the road is clear for cannabis when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi said. “But right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we’re going to focus on the opportunity at hand.”
Could you get your weed delivered through Uber? CEO Dara Khosrowshahi discusses the potential business strategy: "When the road is clear for cannabis and federal laws come into play, we're absolutely going to look at it." (via @CNBCTechCheck) https://t.co/6VM454ugka pic.twitter.com/bRjpv7vvhU
— CNBC (@CNBC) April 12, 2021
The tech executive was specially asked about the possible expansion into the cannabis market in light of legalization recently being enacted in New York. And if polling from that state is any indication, Uber would see the demand for deliveries that it’s looking for, as 53 percent of New Yorkers said in a survey that they would favor having that option available to consumers.
But for now, the CEO said the business is keeping its eyes on current expansions, which includes its recent acquisition of the alcohol delivery service Drizly. That company did launch an ancillary cannabis delivery service called Lantern—but following the Uber deal, it announced that the two entities would be separated, with Lantern operating independently as a private company.
Of course, as a national corporation, Uber is also making a risk assessment given the ongoing ban on cannabis at the federal level. But a policy change to that end could come sooner than later.
Senate Majority Leader Chuck Schumer (D-NY) has said that a bill to legalize marijuana that he’s been working on with Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) will be released “shortly.”
On the House side, Judiciary Chairman Jerrold Nadler (D-NY) has similarly signaled that his cannabis descheduling bill—the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act—will be reintroduced this session. That proposal passed the House last year but did not advance in the Senate.
With Democrats in control of both chambers and the White House this session, there’s renewed hope among advocates that the days of prohibition are soon to be over. Still, questions remain about President Joe Biden’s role in the reform, as he opposes adult-use legalization and his press secretary said last month that his position “has not changed” to that end.
In any case, Uber’s apparent interest in participating in the market once those federal barriers are lifted is another sign of the industry’s potential. That said, many advocates have expressed that small businesses—particularly those operated by people most impacted by cannabis criminalization—should be prioritized in any legalization legislation over large companies.