Cannabis-adjacent businesses will be ineligible for loan assistance under the $2 trillion stimulus plan approved by federal lawmakers and signed into law by President Trump last month, Marijuana Moment reports.
The plan, called The Coronavirus Aid, Relief, and Economic Security (CARES) Act, aims in part to assist American companies with 500 or fewer employees via a Paycheck Protection Program. The federal Small Business Administration (SBA) already confirmed, however, that cannabis businesses will not receive federal financial assistance because the industry remains federally prohibited. Additionally, under SBA rules, ancillary firms that work directly with or help to benefit federally illegal operations cannot receive loans from the administration, meaning these businesses will also be omitted from the coronavirus relief stimulus plan.
The type of businesses that fall under SBA’s category of “indirect marijuana businesses” include: “businesses that provide testing services, or sell or install grow lights, hydroponic or other specialized equipment, to one or more Direct Marijuana Businesses; and businesses that advise or counsel Direct Marijuana Businesses on the specific legal, financial/accounting, policy, regulatory or other issues associated with establishing, promoting, or operating a Direct Marijuana Business.”
The rule essentially sections off the entire cannabis space, including ancillary companies who have cropped up to support the budding industry, from receiving any of the federal government’s coronavirus loan assistance.
Josh Kappel, a founding partner at Colorado’s Vicente Sederberg, a cannabis industry law firm, called the restrictions “egregious” and “incredibly unfair.”
“These companies pay Social Security and Medicare taxes, unemployment taxes, and, of course, federal corporate taxes. In every way, they deserve to be treated like any other business when it comes to these emergency loans.” — Kappel, in a statement to Marijuana Moment
Hemp industry operators will have access to the federal assistance because the industry has been federally legalized.
This content has been curated and re-published from Ganjaprenuer.com. Please click the link below to view this content from the original source.
Content Credits: Originally written by Graham Abbott and published to Ganjaprenuer.com on 2020-04-08 16:13:29.