Marijuana businesses may be eligible for business grants from the $1.9 trillion stimulus package.
Under the American Rescue Plan Act (ARPA), cannabis-related businesses are eligible for two programs that provide grants, and a third program providing tax credit.
According to industry experts, the three ARPA programs in question are the following: the state small business credit initiative, employee retention credit program and through payroll protection loans and grants.
State Small Business Credit Initiative and Marijuana Businesses
Over $10 billion is being supplied to states across the US in order to support small businesses.
Experts in the marijuana industry argue that cannabis businesses could be eligible for the financial support being provided by the State Small Business Credit Initiative. This includes both consultancy and plant-touching businesses in the marijuana industry.
However, experts have also cautioned cannabis companies to check their state’s financing program’s guidelines for their eligibility, and that whether they will be eligible or not will depend on their state’s stances and regulations.
Employee Retention credit
Prior to the release of the new stimulus package, small businesses were only eligible for employee retention credit if they had seen a 50% quarterly drop in gross receipts.
With the release of the new stimulus package, the drop in sales required to be eligible has been reduced to only 20%.
The one problem with enrolling with the retention program is that most cannabis companies have seen an increase in sales during the coronavirus pandemic instead of a drop. This was partly due to cannabis stores being declared “essential” businesses during the pandemic in some states. This is most notable in Washington state, where cannabis businesses had their best year in 2020.
Many of the exceptions to this norm can be found in the state of Nevada, where dispensaries and cannabis businesses lost sales due to the state’s lockdown guidelines and with cannabis sales only being legalized in May 2020.
Payroll stimulus loans and grants
Though the program is due to expire in roughly a week, ARPA included roughly $7.25 billion in funds to the Paycheck Protection Program (PPP).
With $100 billion in untapped funds in the program, and with the House having voted in favor of extending the program by 2 months, there is still a possibility for some consultancy businesses in the cannabis industry to opt into the program.
Although the US Small Businesses Administration (SBA) has barred cannabis companies from directly opting into the program, there are possible workarounds that could provide aid to cannabis companies. As an example, the SBA stated that a plumber or tech support company that also worked in the cannabis industry would be eligible.
At The Weed Blog, we strive to produce the latest online news resources regarding marijuana. We also review various strains of cannabis or other edible counterparts. We are committed to helping you find valuable information about marijuana on our website. With marijuana laws constantly changing, learn from us what you can do to promote activism in your area. Otherwise, consider these other top-tier articles regarding cannabis: