Will Cannabis Companies Ever Receive Funding under the PPP and EIDL Programs?

2 min

On April 23, 2020, Representatives Earl Blumenauer (D-OR) and Ed Perlmutter (D-CO) introduced the Emergency Cannabis Small Business Health and Safety Act, which would allow legal cannabis companies and related service providers to become eligible for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) program administered by the Small Business Administration (SBA). This bill is the follow-up to a letter written by 10 senators urging congressional leadership to allow state-legal cannabis companies to be eligible for funding under the CARES Act. Cannabis companies and their service providers in locations where medicinal and recreational cannabis is legal cannot currently receive funding from the PPP and EIDL programs because the federal government lists cannabis as a Schedule 1 illegal drug. The bill utilizes the country's prevalent recreational and medicinal cannabis programs to determine the eligibility of such cannabis companies to receive funding under the CARES Act.

Under the proposed legislation, cannabis-related legitimate businesses are broadly defined as all companies that involve handling cannabis or cannabis products, including cultivators, manufacturers, and producers. Service providers are also broadly defined as companies that sell goods or services to cannabis-related legitimate businesses, which specifically includes the sale or lease of real estate. Finally, the proposed legislation also protects employees of the SBA in their role in providing loans to cannabis-related legitimate businesses. The proposed Emergency Cannabis Small Business Health and Safety Act would help legal medicinal and recreational cannabis companies and their service providers obtain crucial funding during the COVID-19 crisis.