The Pandemic hit the economy hard. COVID-19 is not impacting every American equally, but it definitely has not skipped over America’s hemp farmers and businesses, many of which are essential to the American food and health systems. Legislation, formally known as the “Coronavirus Aid, Relief, and Economic Security Act” (or the CARES Act) – was approved by the Senate 96-0 following days of negotiations. The CARES Act is a sweeping third-wave relief package in response to the COVID-19 pandemic and became law March 27, 2020. One of the most highly anticipated provisions of the CARES Act is the “recovery rebates” for individuals which will provide a one-time cash payment up to $1,200 per qualifying individual ($2,400 in the case of eligible individuals filing a joint return) plus an additional $500 for qualifying children.
Federal Relief Is On The Way
Under the CARES Act, small businesses can receive loans to cover payroll expenses, health care benefits, employee salaries, rent, utilities and interest on mortgage debt. Some hemp businesses will qualify for the CARES Act’s new Paycheck Protection Program (PPP). The PPP will provide up to $350 billion in cash-flow assistance to employers that maintain their payroll during the COVID-19 crisis. PPP loans are federally guaranteed, and the portion of the loan used for covered payroll costs is fully forgiven after eight weeks.
In order to be eligible under the CARES Act, hemp businesses must be in compliance with their codified state and federal rules. To qualify for these small business loans, businesses must employ 500 employees or less, including all full-time and part-time employees. Nearly all U.S. hemp businesses fall into this category. Eligible recipients must also submit additional documentation as part of their loan application. The CARES Act delegates authority to depository institutions, insured credit unions, institutions of the Farm Credit System and other lenders to provide loans under this program.
Why You Should Get Your Medical Marijuana Card
Veriheal has satisfied millions of patients nationwide by giving them access to these benefits
- Larger purchase limits
- Peace of mind
- Enhanced legal protection
- Access to higher potency strains
- Save up to 25% on cannabis purchases
- Skip the line at the dispensary
Are Hemp Farmers Left Out?
Farmers who say they’re not getting needed assistance from federal coronavirus relief are looking to Congress to change the oversight keeping them from accessing help from the Small Business Administration. Hemp farmers and farming businesses with federally backed mortgage loans secured by USDA may request forbearance for up to 180 days, during which no fees, penalties, or interest will accrue. It’s not unusual that the SBA excluded farms from the coronavirus relief emergency loan package, as farmers are typically included in – and expected to apply for – any available U.S. Department of Agriculture disaster funding.
In the case of the coronavirus, there appears to be no disaster declaration by the secretary of agriculture or other agriculture-specific disaster funding authorized by the CARES Act, so Congress is working to clarify to SBA its apparent intent that farms should be included in the EIDL offered through SBA in this case.
Cannabis Businesses Are Not Eligible
In light of the COVID-19 outbreak, the SBA revised its “Disaster Loan” process to provide low-interest “Disaster Loans” to eligible small businesses. Consequently, because of the continued Schedule I status of cannabis under federal law, cannabis businesses will not be entitled to receive Disaster Loans from the SBA, regardless of whether they qualify as a struggling small business. The problem, however, is that the SBA still refuses to assist state-legal cannabis businesses in equal need of small business loans.
Specifically, in a 2018 Policy Notice, the SBA reaffirmed that cannabis businesses – and even some adjacent firms who service the cannabis industry but don’t touch the plant – cannot receive aid in the form of federally backed loans. Moreover, the conflict between state and federal law continues to prevent cannabis business from receiving assistance from the U.S. Small Business Administration (SBA) under the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6201).
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