President Joe Biden’s nominee to head the U.S. Small Business Administration (SBA) committed during a Senate hearing on Wednesday to examine marijuana businesses’ inability to receive aid that is available to companies in other industries—though she didn’t make any promises to solve the problem.
“We do have legal state cannabis businesses,” Sen. Jacky Rosen (D-NV) told the nominee, Isabel Guzman, near the end of the two-hour meeting of the Senate Committee on Small Business and Entrepreneurship. “Will you work with our office to commit to consider providing legally operating cannabis small businesses equal access to SBA resources—loans, counseling, mentoring and training?”
As is typical at Senate confirmations, the nominee’s response was rather opaque, but she did commit to study cannabis issues and work with the senator on possible solutions.
“I commit to further understanding those rules and regulations,” Guzman replied, “and seeing how we can partner with your office to serve all the small businesses who are in need.”
Nevada’s legal cannabis small businesses should have full access to @SBAGov resources, and I thank @IsabelCGuzman for her commitment to working with me on this critical issue. pic.twitter.com/zreVfU4VBO
— Senator Jacky Rosen (@SenJackyRosen) February 3, 2021
Cannabis businesses and industry groups have complained about being excluded from federal small business programs open to virtually all other industries. But the COVID-19 pandemic and ensuing economic slowdown—as well as last summer’s wildfires—have brought new attention to the disparity.
SBA officials confirmed in March of last year, as the pandemic broke out across the country, that state-legal cannabis businesses are ineligible for federal disaster relief loans offered to other small businesses. The agency went even further to say that the loans are also off-limits to businesses that indirectly serve the marijuana industry.
Rosen, along with Sen. Ron Wyden (D-OR) and other lawmakers, penned a letter to Senate leadership in April arguing that the cannabis industry deserved equal access to federal relief.
“Workers at state-legal cannabis small businesses are no different from workers at any other small business—they show up to work every day, perform their duties, and most importantly, work to provide for their families,” the senators wrote. “This lack of access to SBA assistance for cannabis small businesses will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers who need support the most.”
By the end of April, supportive lawmakers in Congress had introduced a bill to extend access to coronavirus relief funds to state-legal cannabis businesses, but the measure did not come to a vote.
Then in September, wildfires on the West Coast hit marijuana hard. Oregon regulators, for instance, said 20 percent of cannabis companies in the state had been encouraged to evacuate. But SBA officials said cannabis companies could not apply for disaster relief loans because marijuana remains federally prohibited.
That said, the agency has touted its work to support companies in the newly legal hemp industry, and it has pressed the U.S. Department of Agriculture to make its rules on the crop more favorable to small businesses.
As Biden makes nominations to top agency posts, marijuana industry advocates and some lawmakers are watching closely to see what the picks might signal about the new administration’s approach.
Guzman, whom Biden has tapped to be administrator of the SBA, has served as the director of the California Office of the Small Business Advocate since 2019 and previously was a deputy chief of staff to the SBA administrator during the Obama administration.
Some in the marijuana industry see Guzman’s background in California as a promising sign.
“While her position on marijuana is unknown,” Michelle Rutter Friberg, deputy director of government relations for the National Cannabis Industry Association, wrote in a blog post, “I’m incredibly hopeful for reform under Guzman—her familiarity with small businesses in California means she is surely well informed on the struggles the cannabis industry faces.
In brief prepared remarks on Wednesday, Guzman pledged to represent small businesses across sectors.
“If confirmed,” she told senators, “I pledge to serve as their voice and represent the enormous diversity across our small businesses—from independent contractors and sole proprietors to startups and innovative technology and science-based firms to main street and manufacturing—of all sizes and all stages of development.”