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Law360 (April 23, 2020, 12:53 PM EDT ) A pair of Democratic congressmen on Thursday introduced a bill in the U.S. House of Representatives that would allow cannabis companies to tap COVID-19 disaster relief funds, the first effort by lawmakers to include the industry in pandemic bailouts.
The bill, introduced by Reps. Earl Blumenauer of Oregon and Ed Perlmutter of Colorado, is intended for a possible fourth COVID-19 relief package that could hit the House floor in the coming weeks. It was not included in an up-or-down vote Thursday approving a Senate-passed interim relief package totalling roughly $480 billion.
The Emergency Cannabis Small Business Health and Safety Act would make cannabis businesses and their service providers eligible for bailout programs run through the Small Business Administration, which currently blocks the industry from accessing them.
"Without providing these businesses the relief needed to carry out the recommended public health and worker-focused measures, we are putting these hard-working people — and ourselves — at risk," Blumenauer said in a statement Thursday, calling cannabis businesses "essential to communities."
"Cannabis businesses are major employers and significant contributors to local economies in Colorado and across the country," Perlmutter said in a statement. "They should receive the same level of support as other legal, legitimate businesses and be eligible for SBA relief funds during this COVID-19 crisis."
Last week, Blumenauer and Reps. Barbara Lee, D-Calif., Don Young, R-Alaska, and Tom McClintock, R-Calif., led 34 House members in writing to the House leadership calling for cannabis businesses to be included in COVID-19 relief bills.
"The COVID-19 outbreak is no time to permit federal policy to stand in the way of the reality that millions of Americans in states across the country face daily — that state-legal cannabis businesses are sources of economic growth and financial stability for thousands of workers and families, and need our support," the lawmakers said.
Since the pandemic struck, cannabis lobbying groups have been pulling out all the stops to lift the SBA's prohibition on dealing with marijuana businesses, which have been stuck on the sidelines as small business across the country scramble to access bailout funds amid pandemic lockdowns.
Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement Thursday that marijuana businesses have been especially hard-hit by the crisis despite being deemed essential businesses that may remain open during lockdowns in many states.
"The cannabis industry employs nearly a quarter of a million Americans and has been deemed essential in state after state, yet many businesses will not survive the pandemic without help," Smith said. "They already face disproportionate financial burdens during normal conditions, and the strains created by the coronavirus response are putting them at an even greater disadvantage and jeopardizing their ability to provide vital healthcare services."
In early April, the NCIA and several other cannabis groups wrote to governors and state treasurers urging them to fill the gap with state disaster relief funds. The letter also asked state leaders to press their congressional delegations for changes to federal bailout bills.
Cannabis attorneys have joined the fray as well. Last week, the International Cannabis Bar Association said in a letter to congressional leaders that the SBA's decision to lock cannabis industry service providers out of relief programs was an untenably vague administrative overreach. The group urged changes to the Coronavirus Aid, Relief and Economic Security Act that would lift the ban.
"The number of businesses in this so-called 'indirect' economy is many times over the size of the 'direct' cannabis market, and this guidance will undoubtedly cause substantial and lasting economic harm to the small business communities across the country and frustrate the stated purpose of the CARES Act," the letter said.
--Additional reporting by Sarah Jarvis and Sam Reisman. Editing by Marygrace Murphy.
Update: This story has been updated with additional information on the legislation.
For a reprint of this article, please contact reprints@law360.com.
