A new Small Business Administration policy could force entrepreneurs to choose between serving cannabis clients and getting a federally subsidized loan. The federal agency said it won’t approve loans to businesses that derive any portion of their revenue from sales to marijuana clients, because the drug is illegal under federal law.
State marijuana legalization has created a moneymaking opportunity not only for licensed growers and sellers but also for a wide range of ancillary businesses, from publicly traded garden product companies to local print shops. Now a new Small Business Administration (SBA) policy could force some entrepreneurs to choose between serving cannabis clients and getting a federally subsidized loan, reports Stateline. The federal agency said last month that it won’t approve loans to businesses that derive any portion of their revenue from sales to marijuana clients, because the drug is illegal under federal law. The policy could hurt local nature centers, architects, designers, attorneys and other businesses that occasionally work with licensed weed industry, experts say.
Supporters of cannabis legalization are speaking out against the lending policy. “This rule would be impossible to implement and wreak havoc across multiple sectors of the economy,” Rep. Earl Blumenauer (D-OR) told the SBA. “For example, would just one order from a cannabis business for soil preclude a locally-owned garden center from receiving federal government loan support in the future?” Nine states and Washington, D.C. allow marijuana to be sold for recreational and medical use and 21 others allow it to be sold for medical use. Nationwide, sales of the plant and its products hit an estimated $8.6 billion in 2017 and supported over 121,000 jobs, said a report from the Arcview Group and BDS Analytics, cannabis industry research firms. That’s almost double the sales Arcview estimated for 2014. Even more jobs have been created at non-marijuana businesses. The SBA has backed over 300,000 loans since fiscal 2013, and some recipients are currently serving cannabis clients. The agency’s new policy could make them ineligible for future loan assistance.