Senator Files Bill To Make Cannabis Businesses Eligible For SBA Loans
Democratic U.S. Senator Jacky Rosen of Nevada last week introduced legislation that would make regulated cannabis businesses eligible for loans and other programs from the federal Small Business Administration (SBA). If passed, the Fair Access for Cannabis Small Businesses Act would help ensure that licensed cannabis businesses have access to the same benefits available to other legal businesses, including the SBA’s popular 7(a) loans, disaster loans, microloans and the Small Business Investment Company (SBIC) program. The legislation also ensures that businesses in the regulated marijuana industry have access to the SBA’s resource partners such as the SCORE business mentoring program, Veterans Business Outreach Centers and Women’s Business Centers.
Rosen has been an outspoken advocate for allowing businesses in the legal cannabis industry access to banking services and resources offered by the SBA. Under current SBA regulations, businesses that provide “direct or indirect products or services that aid the use, growth, or enhancement of cannabis from accessing SBA loans and programs,” according to a statement from the senator’s office.
“The unfair barriers to basic federal support and resources have hurt our state’s legally-operating cannabis small businesses,” Rosen said on November 18. “This legislation will level the playing field so that cannabis small businesses – including those owned by people of color, women, and veterans– have access to the same federal resources and loans that other legal businesses are entitled to.”
Expanding Opportunities For Cannabis Businesses
In 2021, Rosen highlighted the need for expanding access to SBA resources to cannabis small businesses operating legally under state law while questioning then-nominee for SBA Administrator Isabel Guzman, who was subsequently approved by the Senate. And earlier this year, she sent a letter urging the Senate Appropriations Committee to include language preventing the SBA from excluding legally operated cannabis small businesses from its loan and entrepreneurship programs. Rosen also previously led a bipartisan letter to House and Senate Armed Services Committee leadership in December 2021, urging fellow lawmakers to keep provisions of the Secure and Fair Enforcement (SAFE) Banking Act in the fiscal 2022 National Defense Appropriations Act.
“Lack of access to capital and banking services remain the greatest barriers to entry into the cannabis industry,” said Layke Martin, executive director of the Nevada Cannabis Association. “We are grateful for Senator Rosen’s efforts to support small cannabis businesses by increasing access to SBA loans and programs.”
Khadijah Tribble, the CEO of the trade group the US Cannabis Council (USCC), praised the introduction of the Fair Access for Cannabis Small Businesses Act, saying that legalizing marijuana alone is not enough to address the harms caused by nearly a century of marijuana prohibition.
“For Black and Brown communities that have been ravaged by the war on drugs for decades, there is a light at the end of the tunnel as the end of cannabis prohibition comes near. But without access to capital through financing tools like SBA loans, most Black and brown cannabis entrepreneurs won’t get the chance to profit from an industry that was once used to stigmatize them — even in states where the plant has been legalized,” Tribble said in a statement from the USCC. “Senator Rosen’s landmark legislation would help advance equity and innovation in the cannabis industry by leveling the playing field for independent cannabis operators. If paired with the SAFE Banking Act, The Fair Access for Cannabis Small Businesses Act would create a regulatory framework that would ensure a vibrant startup scene and a diversity of players.”