On March 27, 2020, the largest economic bill in US history was signed into law – the Coronavirus Aid, Relief, and Economic Securities Act (the “CARES Act”). The CARES Act provides $500 billion in corporate aid, $100 billion to health-care providers, $150 billion to state and local governments, and $349 billion in small business loans. The legislation further provides billions of dollars in debt relief on existing loans.
The CARES Act also includes a “Paycheck Protection Program”, whereby small businesses can receive loans to cover payroll expenses, group health care benefits, employee salaries, interest on mortgage obligations, rent, and utilities. To qualify for these small business loans, businesses must employ 500 employees or less.
Because marijuana remains a Schedule I substance under the federal Controlled Substances Act, marijuana businesses will most likely not qualify for any of the relief offered to small businesses under the CARES Act. Moreover, marijuana businesses currently do not qualify for relief under the US Small Business Administration’s (“SBA”) Disaster Loan Assistance Program. The SBA’s stated policy continues to be that its loans are not available to marijuana businesses, even if those businesses are licensed and operating lawfully under state law.
In contrast, Hemp’s legal status under federal law should allow Hemp business owners to take advantage of the recent federal economic relief packages being offered to other small businesses. Accordingly, Hemp businesses should be able to take advantage of the stimulus programs offered under the CARES Act as well as being able to apply for disaster loans offered by the SBA.
The inability of marijuana businesses to participate in the COVID-19 relief programs, again highlights the need for federal legalization of marijuana. Licensed marijuana businesses have proven themselves to be essential to the economic health of the states in which they operate and should therefore be able to take advantage of any economic stimulus options enacted at the federal level.
For more information on the regulation of hemp and marijuana businesses in Washington State, please contact Heather Wolf.