Senators are renewing pressure on the marijuana industry’s access to loans and resources from the federal small business administration

A coalition of Democratic senators is asking a core committee to include provisions in an upcoming spending bill that would give small marijuana businesses fair access to federal Small Business Administration (SBA) loan programs and entrepreneurial development resources available to businesses in every other sector.

In a letter to the leadership of a Senate Appropriations subcommittee announced last month in a Monday news release, senators requested language be added to the Fiscal Year 2025 spending bill for Financial Services and General Government Related Agencies (FSGG) to prevent SBA. “from denying loan applications for the 7(a) Loan Guarantee Program, Disaster Assistance Program, Microloan Program, and 504/Certified Development Company Loan Program to legally operating small cannabis businesses in states that have legalized the sale and use of cannabis.”

The letter, led by Senator Jacky Rosen (D-NV), also implores panel leaders to add language to the spending legislation “prohibiting SBA from excluding such state-legal cannabis businesses from participating in or benefiting from SBA’s entrepreneurial development programs.” ”

The senators pointed to the “clear shift in public opinion” in favor of reform, with the vast majority of states implementing some form of legalization and markets generating billions of dollars in tax revenue.

In addition to Rosen, signatories to the letter include Sens. Cory Booker (D-NJ), Jeff Merkley (D-OR), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Ed Markey (D-MA), Alex Padilla (D-CA) and Michael Bennett (D-CO).

“However, SBA’s current policy excludes from its loan and entrepreneurial development programs all small businesses with ‘direct’ or ‘indirect’ products or services that promote the use, growth, enhancement, or other development of cannabis,” the senators wrote. “As a result, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA funding and support and participating in or doing business with a rapidly growing and legal industry.”

This is at least the third time Rosen has sent a letter with a similar request to Appropriations subcommittee leaders in recent sessions, although the requested language has not yet been included in a spending bill.

“Currently, most banks are reluctant to serve even state-legal cannabis businesses due to conflicts with federal law, meaning these legally operating small businesses are often forced to operate on a cash-only basis, potentially endangering public safety to conduct business do,” the spokesperson said. lawmakers said in the new letter. “SBA loan programs would be especially helpful for small cannabis businesses because they would fill the gaps left by the private sector and could increase the availability of capital for many entrepreneurs – including our minority, women and veteran entrepreneurs.”

So far, Senate leadership has repeatedly discussed prioritizing a bipartisan bill to protect financial institutions that partner with state-licensed cannabis companies this year. But it remains to be seen whether that will ultimately happen, especially in light of reports of opposition from key Republicans like Senate Minority Leader Mitch McConnell (R-KY).

Rosen said last year that she ultimately wants to see the Secure and Fair Enforcement Regulation (SAFER) Banking Act amended to include provisions allowing cannabis companies to access SBA services.

“Access to SBA loans and entrepreneurship programs would support a fast-growing industry that creates jobs, supports small businesses and increases revenues in states that have chosen to legalize cannabis,” said the new letter she and the nine other Democratic senators wrote.

“We strongly support SBA making all of its programs open and available to all state-legal small cannabis businesses. Therefore, we ask the Subcommittee on Financial Services and General Government to include bills in your upcoming legislation to expand SBA lending and entrepreneurship programs to small cannabis businesses legally operating in states that permit the sale and use of cannabis for medicinal or recreational purposes allow. .”

Rosen also helped advocate for language in a recently introduced federal bill for marijuana legalization that calls for an SBA pilot program that would provide “intermediary lending” to “provide direct loans to eligible intermediaries who are on their turn providing small business loans to startups, companies owned by individuals. affected by the War on Drugs, and socially and economically disadvantaged small businesses.”

In a press release about the cannabis letter and three other requests she recently filed, Rosen said that “small businesses are the backbone of Nevada’s economy, which is why I am leading the effort to cut through the red tape that prevents them from accessing capital and working to secure federal funding for the resources they need to thrive.”

Read the senators’ letter regarding SBA cannabis industry access below:

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