On Wednesday, in a Senate committee hearing about small business, President Joe Biden’s nominee for the front person of the US Small Business Administration (SBA) acknowledged the inconsistencies in equitable treatment–namely, to cannabis businesses. Although the candidate, lsabel Guzman, has spoken favorably about looking into these issues for ‘mom and pop’ cannabis businesses, she was careful to not make any commitments about possible outcomes.
“We do have legal state cannabis businesses,” Sen. Jacky Rosen (D-NV) said, during the Committee on Small Business and Entrepreneurship. “Will you work with our office to commit to consider providing legally operating cannabis small businesses equal access to SBA resources—loans, counseling, mentoring and training?”
“I commit to further understanding those rules and regulations,” Guzman replied, “and seeing how we can partner with your office to serve all the small businesses who are in need.” Later, Rosen’s social media team posted about the exchange with Guzman on her twitter account.
Guzman, if confirmed as leader of the SBA, will be working with the new presidential cabinet to find a pathway for federal interaction with cannabis businesses. Although Biden has not shown particular support for legalization, his pick for commerce secretary has experience in a state with a fully functional medical marijuana program, and who favors having state-run cannabis businesses much like state-run liquor stores. Cannabis enthusiasts and business owners alike can hope that a democratic administration will help pave the way for cannabis to become less stigmatized, and decriminalized on a federal level.
Detrimental effects from the pandemic, along with last summer’s West Coast wildfires, has emphasized the disparity between cannabis businesses and traditional businesses. Specifically, being excluded from federal small business programs that are currently helping small businesses to survive this economic downturn. Last year, SBA officials had to break the news to state-legal cannabis entrepreneurs that they were ineligible for federal disaster relief loans. Additionally, these loans are essentially unavailable for businesses that indirectly serve the marijuana industry, such as packaging and transportation services.
Rosen, Sen. Ron Wyden (D-OR), and other legislators wrote to the Senate in April of last year, arguing that the cannabis industry businesses were no different from other businesses and deserved equal access to federal relief programs.
“Workers at state-legal cannabis small businesses are no different from workers at any other small business—they show up to work every day, perform their duties, and most importantly, work to provide for their families,” the senators wrote. “This lack of access to SBA assistance for cannabis small businesses will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers who need support the most.”
By May of last year, congressman had worked together to introduce a bill to extend access to coronavirus relief funds for state-legal cannabis businesses. The measure did not make it before the senate for a vote.
Again, later in the year, the topic of equitable treatment of businesses became evident as marijuana growers were faced with devastating wildfires. Businesses who had been in operation for years were taking detrimental losses, and being told by SBA officials that said cannabis companies could not apply for disaster relief loans because marijuana remains federally prohibited.
These complicated issues will not be going away or decreasing in the coming years, and with Guzman, or another candidate at the helm, there will be some distinct decisions made that have the potential to benefit or harm a vastly growing industry.
The agency has communicated a favorable outlook on building foundations for the new field of legal hemp development. The SBA has reported working with the US Department of Agriculture to give consideration to small business owners as this industry develops.
Guzman’s experience includes the post of the director of the California Office of the Small Business Advocate since 2019, and previous experience working for the SBA administrator during the Obama administration.
It is the hope of many Americans involved in the fight for small cannabis businesses, that Guzman’s experience with California business affairs will give her a direct and open approach to her proposed federal office’s handling of SBA treatment of marijuana entrepreneurs.
Michelle Rutter Friberg, deputy director of government relations for the National Cannabis Industry Association, spoke about this hope specifically in a blog post, “I’m incredibly hopeful for reform under Guzman—her familiarity with small businesses in California means she is surely well informed on the struggles the cannabis industry faces.
Brief remarks made in the Wednesday meeting leaves us on a hopeful note with these words: “If confirmed,” Guzman told senators, “I pledge to serve as their voice and represent the enormous diversity across our small businesses—from independent contractors and sole proprietors to startups and innovative technology and science-based firms to main street and manufacturing—of all sizes and all stages of development.”
Guzman has made it clear that her plans are to support small businesses, and there is no denying that cannabis businesses will be an important piece of SBA business in coming years. Watch for further news on the Biden Administration picks and how they will affect cannabis trends across the US in 2021.
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