Politics
Senators Renew Push For Marijuana Industry Access To Federal Small Business Administration Loans And Resources
A coalition of Democratic senators is asking a key committee to include provisions in an upcoming spending bill allowing small marijuana businesses to have fair access to federal Small Business Administration (SBA) loan programs and entrepreneurial development resources that are available to companies in any other industry.
In a letter sent to leadership on a Senate Appropriations subcommittee last month that was announced in a press release on Monday, the senators requested that language be added to the Fiscal Year 2025 Financial Services and General Government Related Agencies (FSGG) spending bill to prevent SBA “from denying loan applications for the 7(a) Loan Guarantee Program, Disaster Assistance Program, Microloan Program, and 504/Certified Development Company Loan Program to legally operating cannabis small businesses in states that have legalized cannabis sale and use.”
The letter, led by Sen. Jacky Rosen (D-NV), also implores the panel’s leaders to add language to the spending legislation “prohibiting SBA from excluding such state-legal cannabis businesses from participating in or benefiting from SBA’s entrepreneurial development programs.”
The senators noted the “clear shift in public opinion” in favor of reform, with the vast majority of states having enacted some form of legalization and markets that have generated billions of dollars in tax revenue.
Beside Rosen, other signatories on the letter include Sens. Cory Booker (D-NJ), Jeff Merkley (D-OR), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Ed Markey (D-MA), Alex Padilla (D-CA) and Michael Bennett (D-CO).
“However, SBA’s current policy excludes from its loan and entrepreneurial development programs all small businesses with ‘direct’ or ‘indirect’ products or services that aid the use, growth, enhancement, or other development of cannabis,” the senators wrote. “Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA financing and support and participating in or doing business with a rapidly-growing and legal industry.”
This is at least the third time that Rosen has led a letter with a similar request to Appropriations subcommittee leaders over recent sessions, though the requested language has not yet been incorporated into any spending bill.
“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 lawmakers said in the new letter. “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.”
To that point, Senate leadership has repeatedly discussed prioritizing a bipartisan bill to protect financial institutions that work with state-licensed cannabis businesses this year. But it remains to be seen if that will ultimately advance, especially in light of reporting about resistance from key GOP members such as Senate Minority Leader Mitch McConnell (R-KY).
Rosen said last year that she ultimately wants to see the Secure and Fair Enforcement Regulation (SAFER) Banking Act amended to include provisions that would allow cannabis businesses to access SBA services.
“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 new letter she and the nine other Democratic senators wrote says.
“We strongly support SBA making all of its programs open and available to all state-legal cannabis small businesses. We, therefore, ask the Subcommittee on Financial Services and General Government to include bill language in your forthcoming legislation to help extend SBA loan and entrepreneurship programs to cannabis small businesses legally operating in states that allow the sale and use of cannabis for medicinal or recreational purposes.”
Rosen also helped advocate for language in a recently introduced federal marijuana legalization bill that calls for an SBA pilot program providing “for intermediary lending” to offer “direct loans to eligible intermediaries that in turn make small business loans to startups, businesses owned by individuals adversely impacted by the War on Drugs, and socially and economically disadvantaged small businesses.”
In a press release about the cannabis letter and three other requests she recently led, Rosen said that “small businesses are the backbone of Nevada’s economy, which is why I’m leading efforts to cut through bureaucratic red tape that prevents them from accessing capital and working to secure the federal funding for resources they need to thrive.”
Read the senators’ letter on cannabis industry SBA access below:
Where Presidential Candidate Donald Trump Stands On Marijuana
