Senators Push For Marijuana Industry Access To Federal Small Business Loans And Services
Eight U.S. senators are urging committee leadership to extend access to federal Small Business Administration (SBA) programs and services to the state-legal marijuana industry.
Sen. Jacky Rosen (D-NV) led a letter to the chair and ranking member of the Senate Appropriations Subcommittee on Financial Services and General Government (FSGG), asking that they include language in future spending legislation that enables SBA access for cannabis businesses.
The letter specifically asks appropriators to prohibit SBA from denying applications for four loan programs for “legally operating cannabis small businesses in states that have legalized cannabis sale and use.”
Further, the lawmakers requested that committee leaders “include bill language prohibiting SBA from excluding such state-legal cannabis businesses from participating in or benefiting from SBA’s entrepreneurial development programs.”
Rosen led a similar letter last year, though the requested language was not ultimately adopted as part of the Fiscal Year 2023 final appropriations package for FSGG. Senators are hoping for a different result for FY 2024 this session.
The letter, which was sent in late March and highlighted in a press release from Rosen’s office last week, was also signed by Sens. Ron Wyden (D-OR), Tammy Duckworth (D-IL), Ed Markey (D-MA), John Hickenlooper (D-CO), Alex Padilla (D-CA), Cory Booker (D-NJ) and Jeff Merkley (D-OR).
“Currently, most banks are reluctant to serve even state-legal cannabis businesses due to conflicts with federal law, meaning that these legally operating small businesses often are forced to operate using only cash, potentially jeopardizing public safety in order to do business,” the senators wrote.
“SBA loan programs would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector and could expand the availability of capital for many entrepreneurs—including for our minority, women, and veteran business owners. Likewise, SBA’s entrepreneurial development programs provide critical training, counseling, and technical assistance to small businesses across the country—resources desperately needed by entrepreneurs in the new and burgeoning state-legal cannabis industry.”
“Access to SBA loan and entrepreneurship programs would support a rapidly growing industry that creates jobs, supports small businesses, and raise revenues in states that have chosen to legalize cannabis,” the letter says.
In a press release about this and two other letters she led that were unrelated to marijuana, Rosen emphasized that small businesses “power our communities and are key pillars of Nevada’s local economy.”
“I’m urging my colleagues to appropriate all adequate resources for Nevada’s small businesses to thrive, particularly businesses in our rural communities, those helping to expand access to child care, and legal cannabis small businesses that deserve equal access to capital,” she said. “We must always take action to see that these small businesses have the support they need to succeed.”
The cannabis letter is one example of how congressional lawmakers are working to normalize financial services for the cash-intensive industry. As the senators wrote, marijuana companies remain largely locked out of simple banking services under prohibition, let alone federally backed loans.
But plans are in the works to resolve that issue, starting with a Senate Banking Committee hearing that was scheduled for this Thursday where members will discuss the recently refiled Secure and Fair Enforcement (SAFE) Banking Act.
Senate Majority Leader Chuck Schumer (D-NY) said during a cannabis rally in New York City on Saturday that, after the legislation moves out of committee, he will bring it to the floor and attach social equity provisions, including expungements for people with prior marijuana convictions.
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Last year, it was rumored that SBA-specific language might also be folded into a so-called SAFE Plus package of marijuana reform bills that Schumer had worked on. But that didn’t materialize.
Senators on both sides of the aisle have been pushing for urgent action on the standalone measure this session.
The SAFE Banking Act would protect banks that work with state-legal cannabis businesses from being penalized by federal regulators. The latest version has been amended in several ways that have encouraged advocates, but as Schumer explained, the plan is to further revise it on the floor to incorporate additional equity provisions.
The bill is considered one of the more passable pieces of cannabis legislation this session with Republicans in control of the House. A former top aide to Senate Majority Leader Chuck Schumer (D-NY) recently wrote an op-ed for Marijuana Moment explaining how the new political dynamics could actually bolster the bill’s prospects of passage this year.
Schumer has emphasized his commitment to advancing the marijuana banking legislation with criminal justice provisions included, calling the broader effort to repair the harms of the drug war a “moral responsibility” for Congress.
A vote in the Senate last month on separate marijuana legislation, however, has raised some questions about whether any modest cannabis reform is achievable under the current congressional makeup. Senate Republicans blocked a procedural motion to advance a bipartisan bill to simply require studies into the medical potential of cannabis for military veterans with chronic pain and PTSD.
The standalone SAFE Banking Act has been approved along largely bipartisan lines in the House in some form several times in recent years. But it’s consistently stalled out in the Senate under both Democratic and Republican leadership.
Schumer has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
For his part, Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is sponsoring the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
Numerous cannabis bills have been filed in Congress in recent weeks beside the banking legislation.
For example, bipartisan congressional lawmakers filed a bill to mandate the automatic sealing of criminal records for certain non-violent federal marijuana convictions.
House and Senate lawmakers also reintroduced legislation last month to provide a safe harbor to insurance companies that work with licensed marijuana businesses.
Rep. Brian Mast (R-FL) introduced legislation last month to protect the Second Amendment rights of people who use marijuana in legal states, allowing them to purchase and possess firearms that they’re currently prohibited from having under federal law.
Reps. Dave Joyce (R-OH) and Alexandria Ocasio-Cortez (D-NY) have filed a bill to incentive state and local marijuana expungements with a federal grant program.
Also last month, Joyce and House Minority Leader Hakeem Jeffries (D-NY) filed a measure designed to prepare the federal government for marijuana legalization, directing the attorney general to form a commission to study and make recommendations about regulating cannabis in a way similar to alcohol.
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