Business
New House Bills Would Make Cannabis Businesses Eligible For Federal Small-Business Aid
Lawmakers in the U.S. House of Representatives have introduced three new bills to make state-legal marijuana businesses eligible for federal small business services, including loans, disaster relief and grant programs.
The package of legislation is aimed at establishing parity for cannabis businesses, which are currently prohibited from receiving federal aid due to marijuana still being classified as a Schedule I controlled substance. The country’s legal cannabis industry nevertheless now supports nearly 320,000 full-time jobs in the U.S., according to industry estimates.
With more states pursuing cannabis legalization, a growing number of legitimate small businesses are excluded from critical @SBAgov programs.
Chair @nydiavelazquez, @Repdwightevans, and @RepGolden have introduced bills to change that.
Read more about their legislation here 👇
— House Committee on Small Business (@HouseSmallBiz) April 20, 2021
The measures are largely similar to legislation introduced by the lawmakers in 2019, with some small changes.
One bill, sponsored by House Small Business Committee Chairwoman Nydia Velázquez (D-NY), would allow marijuana businesses to access resources from the federal Small Business Administration (SBA). The Ensuring Safe Capital Access for All Small Businesses Act of 2021, which had not been assigned a bill number as of Tuesday afternoon, would expand access to services such as microloans, disaster assistance and the agency’s loan guaranty program.
“With more and more states pursuing legalization, including my home state of New York, there are a growing number of legitimate small businesses that are excluded from critical SBA programs,” Velázquez said in a statement, noting that much of the cannabis industry consists of small businesses.
Compared to Velázquez’s 2019 bill, the new version adds clauses meant to expand the availability of services. While the 2019 bill applied to SBA itself, provisions in the new legislation also prevent SBA intermediaries, private lenders and state and local development companies from declining to work with businesses simply because of their marijuana-related work.
Another new section deals with debentures—certain unsecured loan certificates—and clarifies that SBA may not decline to purchase or guarantee a debenture just because of a business’s involvement in cannabis. Nor can other small business investment companies decline to provide assistance to the cannabis sector.
“This legislation will spark growth by extending affordable capital to small firms in the cannabis space,” she continued. “Simultaneously, the bill acknowledges the structural disadvantages facing entrepreneurs of color and seeks to level the playing field.”
Another newly refiled measure, H.R. 2649, sponsored by Rep. Dwight Evans (D-PA), would establish a U.S. Small Business Administration (SBA) grant program to provide funding to state and local governments to help them navigate the licensing process for cannabis businesses. The bill, which also removes marijuana from the Controlled Substances Act, specifies that the grant money should be used to benefit communities disproportionately impacted by the drug war.
My #HomegrownAct would help small businesses navigate #cannabis licensing & employment with a focus on communities most impacted by the War on Drugs.
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Read more here: https://t.co/Do7ek2STWB https://t.co/K91iHPcCqk— Congressman Dwight Evans (@RepDwightEvans) April 20, 2021
“My bill would act as a poverty-buster and help homegrown small businesses, which are the backbone of our economy and our neighborhoods. We need to make sure that the booming legal cannabis industry does not become consolidated in the hands of a few big companies,” Evans said.
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A third bill, H.R. 2649, from Rep. Jared Golden (D-ME), would prohibit SBA partners that provide guidance and training services from denying help to businesses solely because of involvement in cannabis. The changes would affect providers such as SBA’s Small Business Development Centers, Women’s Business Centers and the Veterans Business Outreach Centers, among others.
“Our continued economic recovery depends on the health of American small businesses of all kinds. Especially in this environment, no Maine small business owner should be turned away from crucial SBA programs that could help them create jobs and lift up the economy,” said Rep. Golden. “My bill would help address this problem by providing small business owners directly or indirectly associated with the cannabis industry with access to the services and resources they need to get their small businesses off the ground and grow.”
Meanwhile, federal lawmakers have been making headway on other cannabis-related proposals. The House passed a cannabis banking bill on Monday, and broader legislation to legalize cannabis at the federal level is expected to be introduced soon.
The banking legislation would ensure that financial institutions can take on cannabis business clients without facing federal penalties. Fear of sanctions has kept many banks and credit unions from working with the industry, forcing marijuana firms to operate on a cash basis that makes them targets of crime and creates complications for financial regulators. The full House passed the bill on a 321–101 vote.
“Even if you are opposed to the legalization of cannabis, you should support this bill,” sponsor Rep. Ed Perlmutter (D-CO) said on the House floor. “The fact is that people in states and localities across the country are voting to approve some level of cannabis use, and we need these cannabis businesses and employees to have access to checking accounts, payroll accounts, lines of credit, credit cards and more.
Other Democrats, including Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are working on legislation that would end federal cannabis prohibition completely.
Schumer said last week that the long-awaited proposal would be introduced “shortly” and placed on the floor “soon.” Schumer has so far declined to discuss the bill’s specifics, though he’s stressed that it will prioritize small businesses and people most historically impacted by the drug war.
In an interview with Marijuana Moment this week, Schumer worried that passage of the House banking bill could actually undermine broader congressional cannabis reform this year.
On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his own legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the House in a landmark vote last year but did not advance in GOP-controlled the Senate.
Meanwhile, support for legalization among U.S. voters continues to grow. More than 9 in 10 Americans (91 percent) now support legalizing cannabis for either medical or adult use, according to a Pew Research Center poll released on Friday. Sixty percent of respondents said that cannabis should be legal for both medical and adult use. Thirty-one percent said it should be legalized for therapeutic purposes only, while just eight percent said it should continue to be criminalized across the board.
A majority of those in every age, race and political demographic included in the poll said they feel marijuana should be legal in some form, although many Republicans remain wary of adult-use legalization. Seventy-two percent of Democrats favored both medical and adult-use legalization compared to only 47 percent of Republicans.
Among the minority in opposition to federal legalization: President Joe Biden (D). White House Press Secretary Jen Psaki said last month that the president’s position on the issue “has not changed,” meaning he still opposes the reform. on Tuesday, Psaki refused to say whether Biden would sign or veto a cannabis legalization bill if passed by Congress.
The president instead backs modestly rescheduling the plant, decriminalizing possession, legalizing medical cannabis, expunging prior marijuana records and letting states set their own policies.
Read the full text of the new legislation below:
Ensuring Safe Capital Access for All Small Businesses Act of 2021 by Marijuana Moment on Scribd
Ensuring Access to Counseli… by Marijuana Moment
Homegrown Act by Marijuana Moment on Scribd
Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push
Arizona collected more than $20 million in medical and adult-use marijuana tax revenue in August, data released by the state this week shows.
Medical cannabis taxes were slightly higher at $6,388,816 last month, compared to $4,542,166 collected from the recreational market, according to the Department of Revenue. The state also took in an additional $9,515,016 from the marijuana excise tax.
However, these figures are preliminary and may change, as some businesses could need additional time to send in data.
July’s cannabis tax revenue was slightly higher compared to August, with the state taking in about $400,000 more in the prior month.
While medical cannabis taxes are still outpacing those from the adult-use market, that gap has been generally been narrowing in the months since recreational sales first launched in January. That’s a trend that’s been observed across numerous states after adult-use marijuana is legalized.
However, Arizona’s medical marijuana market is well-established, and some industry experts don’t necessarily expect recreational sales to overtake the medical program for some time.
Overall cannabis tax revenue from January through August totaled $115,701,426, according to the data the Department of Revenue is reporting so far.
Other states are also seeing a windfall in marijuana tax dollars as more markets mature and sales continue to increase.
For example, Maine recreational marijuana sales broke another record in August, exceeding $10 million for the first time since the adult-use market launched in October 2020.
Adult-use cannabis sales in Illinois exceeded $120 million in August, state officials recently reported. It’s the second highest sales record since the state’s recreational market launched last year and the sixth month in a row that sales surpassed $100 million.
Massachusetts marijuana sales have topped $2 billion since the state’s adult-use market launched in late 2018, the Cannabis Control Commission reported last week.
California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last month. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.
A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”
In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.
Michigan marijuana sales broke another record in July with more than $171 million in cannabis transactions, according to data from the state’s regulatory body. There were $128 million in adult-use sales and $43 million in medical cannabis purchases.
Throughout the pandemic, many states allowed cannabis retailers to remain open—with governors and regulators in several markets declaring marijuana businesses to be essential services—and some jurisdictions issued emergency rules allowing curbside pickup, delivery services or other more relaxed policies in order to facilitate social distancing.
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Maine recreational marijuana sales broke another record in August, exceeding $10 million for the first time since the adult-use market launched in October 2020.
The state’s Office of Marijuana Policy reported that the state’s 53 adult-use cannabis shops brought in about $10.2 million in marijuana purchases last month. And that translates into about $1 million in tax revenue for the state, which has a population of just 1.3 million.
By comparison, Maine cannabis sales for recreational consumers amounted to just $1.1 million during the first month of retail sales less than a year ago. That record has been broken each subsequent month.
While August proved to be a record-breaking month for marijuana purchases—with 133,969 sales transactions—it’s only slightly higher compared to July, when the state saw about $9.4 million in adult-use purchases. Those figures don’e include medical cannabis sales, which are tracked separately.
Via Maine Office of Marijuana Policy.
According to the Portland Press Herald, regulators have credited summer tourism for the sales spike.
But in general, states across the U.S. have seen similar trends over recent years. And marijuana sales records have been consistently broken over the past year despite the coronavirus pandemic.
Adult-use cannabis sales in Illinois exceeded $120 million in August, state officials recently reported. It’s the second highest sales record since the state’s recreational market launched last year and the sixth month in a row that sales surpassed $100 million.
Arizona brought in about $21 million in medical and adult-use marijuana tax revenue in July, state officials recently reported on a new webpage that enables people to more easily track how the industry is evolving.
California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last month. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.
A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”
In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.
Michigan marijuana sales broke another record in July with more than $171 million in cannabis transactions, according to data from the state’s regulatory body. There were $128 million in adult-use sales and $43 million in medical cannabis purchases.
Throughout the pandemic, many states allowed cannabis retailers to remain open—with governors and regulators in several markets declaring marijuana businesses to be essential services—and some jurisdictions issued emergency rules allowing curbside pickup, delivery services or other more relaxed policies in order to facilitate social distancing.
Marijuana Legalization Doesn’t Lead To Increased Youth Use, American Medical Association Study Finds
A New York-based lobbying firm that’s headed by a former Republican U.S. senator announced on Tuesday that it is entering the marijuana space after the newly inaugurated governor took key steps toward implementing legalization in the state.
Former Sen. Alfonse D’Amato (R-NY) founded Park Strategies in 1999, just after leaving the Senate with an established record of supporting the war on drugs. Now, his firm is getting into the cannabis business, offering services to influence regulations for both marijuana companies and ancillary markets.
“With Governor Kathy Hochul’s prioritizing the cannabis law by making appointments to the cannabis office and governing board so quickly after having taken office tells us New York is serious about growing the cannabis industry in the state, and we are happy to be making our own investment to assure that success,” D’Amato said in a press release.
Joseph Rossi, who is heading the firm’s Cannabis Practice Group, said Park Strategies “has deep roots in the cannabis space,” noting work on state cannabis legislation over the years.
Hochul’s move to make the marijuana regulatory appointments so quickly after replacing former Gov. Andrew Cuomo (D) has been welcome news for advocates and industry stakeholders. Cuomo, who resigned amid a sexual harassment scandal, faced criticism for slow-walking the appointments after signing legalization into law this year.
And evidently, excitement about the cannabis developments in New York isn’t reserved to traditional advocates.
D’Amato wasn’t particularly bullish about marijuana reform during his time in Congress. For example, he introduced a bill and amendment in 1990 that would’ve allowed taxpayers to designate overpayments to fund drug war enforcement.
He also cosponsored an array of anti-drug legislation, including resolutions condemning Mexico over its “failure” to cooperate with the U.S. in “controlling the transport of illegal drugs and controlled substances” and promoting the Reagan-era Red Ribbon Week.
D’Amato also signed onto Sen. Strom Thurmond’s (R-SC) Violent Crime and Drug Enforcement Improvements Act, which would have expanded federal asset forfeiture authorities, made it so juveniles could be transferred to adult court for certain violent or drug-related crimes and established a new office to “plan and coordinate drug enforcement efforts” for the federal government.
At one point in 1986, D’Amato teamed up with then-New York City Mayor Rudy Giuliani for a stunt where they went “undercover” and posed as people attempting to purchase crack cocaine to illustrate the ease of the transaction in the city.
Notably, however, D’Amato was not one of the 35 senators who signed onto a 1998 resolution that expressed support for the federal system of determining “the safety and efficacy of drugs” and criticized “efforts to circumvent this process by legalizing marijuana, and other Schedule I drugs, for medicinal use without valid scientific evidence and the approval of the Food and Drug Administration.”
And his position on cannabis policy has shifted significantly in the years since he left the Senate.
In 2017, D’Amato actually became a senior policy advisor for the pro-legalization Marijuana Policy Project’s New York affiliate.
“Nobody was more anti-drugs than I was,” the former senator wrote in an op-ed for The New York Daily News at the time. “However, as I have learned more about marijuana, particularly medical marijuana, over the last several years, my views—like the views of most Americans—have changed.”
He explained his evolution on the topic in an earlier piece for The Long Island Herald in 2014.
“I know it’s a tough pill to swallow, and if you asked me five years ago if I would ever consider supporting legalizing medical marijuana, I would’ve say, ‘Not a chance,'” he wrote. “But times are changing, and marijuana has become a viable form of alternative medicine for those suffering from many debilitating diseases such as ALS, multiple sclerosis, cancer and others. When traditional medicines fail to offer relief, why not give patients alternatives?”
The overlap between the marijuana industry and politics has become pronounced in recent years as more states have moved to end prohibition.
President Joe Biden’s pick to head up federal drug policy worked for a major marijuana business last year, according to his financial disclosure reports.
Tom Price, the former U.S. Department of Health and Human Services (HHS) head under President Trump is also serving as a member of the board of directors for a medical marijuana business in Georgia. Like D’Amato, he similarly resisted reform during his time in Congress.
Perhaps the most well-known GOP lawmaker-turned-marijuana executive is former House Speaker John Boehner (R-OH), who has faced criticism from activists over his previous opposition to legalization while in office before joining the board of marijuana company Acreage Holdings.
Marijuana Legalization Doesn’t Lead To Increased Youth Use, American Medical Association Study Finds
Photo courtesy of Philip Steffan.
