Washington, D.C. – U.S. Sens. Ron Wyden and Jeff Merkley today announced they are requesting that the Small Business Administration (SBA) be prohibited from denying loan applications to cannabis small businesses in states like Oregon that have legalized cannabis use.
In the Oregon lawmakers’ letter to Senate colleagues overseeing SBA appropriations, they urged language prohibiting the SBA loan denials to cannabis businesses by noting the clear shift in public opinion toward supporting legal cannabis and the tax revenues these businesses generate for states.
“States collected an estimated $1.3 billion in tax revenue from legal cannabis sales in 2018,” Wyden and Merkley wrote. “However, SBA’s current policy excludes small businesses with ‘direct’ or ‘indirect’ products or services that aid the use, growth, enhancement, or other development of cannabis from SBA-backed financing. Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with a rapidly-growing and legal industry.”
The SBA’s loan programs provide financial assistance in the form of loans and loan guarantees to small businesses who cannot easily access capital, a problem disproportionally faced by minority entrepreneurs.
“Currently, most banks are reluctant to serve cannabis businesses due to conflicts with federal law, meaning that these businesses often are forced to operate using purely cash, creating an unsafe operation,” the senators wrote. “SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector. Access to these SBA loan programs could ensure that small businesses – especially those led by our minority, women, and veteran entrepreneurs – can raise money for their ventures and support job creation.”
The letter comes in addition to legislation sponsored by Wyden and Merkley that would make cannabis businesses eligible for SBA assistance, forbid Small Business Development Centers and Women’s Business Centers from declining to serve those businesses, establish the Cannabis Opportunity Program for SBA microloans and provide grants to minimize barriers for under-represented groups to participate in cannabis businesses.
In addition to Wyden and Merkley, other co-signers of the letter led by U.S. Sen. Jacky Rosen (D-NV) include U.S. Sens. Tammy Duckworth (D-IL), Michael F. Bennet (D-CO), Kirsten Gillibrand (D-NY), Bernard Sanders (I-VT), Edward J. Markey (D-MA), Cory A. Booker (D-NJ), Robert Menendez (D-NJ) and Kamala D. Harris (D-CA).
A copy of the entire letter is here.
A web version of this release is here.