A Lack of Federal COVID-19 Relief Impacts Cannabis—But A Proposal May Change That

As bailout money for businesses and stimulus checks for individuals come rolling in, one industry is left entirely out of the equation: cannabis. 

Although in many states, cannabis has been deemed an essential industry and allowed to stay open, that’s not the case in every state, and even in essential states, sales have taken a hit because of social distancing and stay-at-home orders. The industry could also use a bailout, and it’s not getting it. 

“As long as cannabis is a Schedule I substance under federal law, it is illegal for any federal funds to be issued directly to cannabis companies that touch the plant,” explained Andrew DeAngelo, cannabis industry consultant and strategic advisor and co-founder of Harborside dispensary in California. “Some funds may, but not likely, get issued to cannabis companies from state or local funds, but I am sorry to say that we will be on the bottom of the list of stakeholders who receive funds. Cannabis may be deemed essential in some legal states, but the stigma of cannabis is alive and well and will prevent funds from coming our way. The political power of cannabis is not yet up to speed enough to make meaningful changes to this outcome given the politics of the stimulus.”

Because of this harsh truth, companies are left to their own devices, promoting, looking for avenues that are still legal, and hopefully staying afloat. 

“Without relief, many companies will be forced to shut their doors, including retailers, brands, farms, and ancillary businesses,” said Sam Ludwig, president of Aster Farms, a sustainable-growth cannabis farm in Northern California. “Our industry currently employees almost 250,000 people. That is more than the textile, brewing, and coal mining industries combined. Cannabis is the fastest-growing industry in the country, so hopefully the government will wise up, take notice, and support the extraordinary growth our industry has witnessed over the past few years.”

Because of this predicament, Lisa Gee, director of marketing at Lightshade, a dispensary chain in Colorado, believes that the best way to help the hurting industry is to create legal loopholes that will help it survive and thrive. 

“I think the silver lining is that the conversation in our industry has shifted a little bit now that it’s been considered an essential service,” she explained. “This is probably the 20th or 25th interview I’ve done on the topic, so there’s definitely conversation. In Colorado, overnight, we saw an implementation of curbside, and even delivery, which was completely off the table before all this happened. So there are ways to do it and potential workarounds if cannabis companies can’t get grants or loans.” 

She also explained that another way the industry could get help in essential states is a loosening of regulations. Understaffed and overworked because of sick employees staying home, folks running dispensaries wish they could help out and hire those who have been laid off from food service, but the red tape of getting a license to work in the industry stops that from happening instantly. 

“There could be some permissions granted to allow people to work on a 90-day basis or 120-day basis without a medical badge,” she explained. “If the industry can come up with some of these suggestions on the state level, then we can continue to add value to our economies. Cannabis has driven over a billion dollars worth of taxable revenue in the state of Colorado and creates a huge base of taxable income that goes to support lots of other industries, not just our own.” 

Hope On The Horizon

In light of the struggle cannabis businesses are facing, as well as the fact that many small businesses have balked at the closing of the first round of COVID-19 funding, 10 senators and 34 members of the house are calling for cannabis businesses in legal states to be eligible for the next round of funding. 

“The cannabis industry supports more than 240,000 workers in the United States, spanning 33 states and the District of Columbia,” the senators wrote in a letter on April 22. “We ask Senate leadership to include in any future relief package provisions to allow state-legal cannabis small businesses and the small businesses who work with this industry to access the critical SBA support they need during these challenging and unprecedented times.”

If cannabis businesses across the U.S. receive federal funding, this will further solidify the need for legal cannabis, and will no doubt save some small cannabis businesses that will otherwise go under during this crisis. In the meantime, many are hoping for local regulations to loosen as well.