Cannabis Health Insider

With gravity, the U.S. government stimulus program has aimed to support smaller firms in the nation to hold on until reopening seems likely. Possibly the most apparent example is the Paycheck Protection Program (PPP). Provision of over $600 billion in forgiveness loans, is intended by the PPP, to small and medium-sized businesses (SMBs). SMBs dealing with authorized cannabis are one of the ineligible SMBs for PPP loans.

The Wall Street Journal recently reported that an initial high demand was seen in licensed cannabis businesses, for their wares, after the start of the pandemic, and additional sources of funding weren’t required. Director of global expansion at DNA Genetics Inc. and California-based cannabis producer, Rezwan Khan reported to the paper that the public stockpiled cannabis like toilet paper.

Despite the differing degrees of the legalization of cannabis in  33 states, the federal government still declares it as illegal. Furthermore, legal cannabis firms were declared ineligible for funds by the U.S. Small Business Administration (SBA).

The struggles for the continuation of operations are growing for the cannabis industry, like any other business landscape that is controlled by smaller firms. Consequently, Congress has extended support for licensed cannabis businesses.

The plan is to allow access to conventional banking ways that are currently closed to cannabis businesses due to their sales being labeled as a criminal operation by the federal government. Consequently, cannabis companies have been compelled to trade in cash only.

However, a $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act was recently established by the U.S. Democrats. The plans to potentially support cannabis companies for loans and access to conventional banking services were also added.

Contents from the proposed Secure and Fair Enforcement (SAFE) Act were added to the HEROES Act, by the Democrats. This could lead to cannabis businesses gaining access to the conventional U.S. banking system.

Last September, the House passed the SAFE Act. However, it hasn’t evolved into a law. Instead, ever since, it has been held up in the Senate controlled by Republicans.

However, Section 11006 of the HEROES Act, entitled “Safe Banking,” has declared that federal laws will permit banks and other monetary services to assist cannabis companies and will hold them accountable on transactions or interests across deposits, checking and lending.

Furthermore, with the potential hope towards the cash element of the cannabis industry, there are other intriguing factors. The proposed legislation has further states that its purpose is the increase and privatization of public safety with the certainty of access to monetary services to licensed cannabis-related businesses and service providers. It also stated its aim for the decline of the amount of cash at such businesses.

A letter was signed by thirty-four attorneys general and addressed to Senate and House Congressional leadership. The AGs disputed that in reference to legal cannabis, there are 3 key respects with which the legislative relief was distinctly directed by the coronavirus pandemic.

They further recorded that competence can be improved in the accumulation of tax revenue, for state and local governments. They further added that there has been an escalation in threats to public safety due to the cash-intensive business models claiming for it to be the common target of criminal activity.

However, the AGs further addressed that law enforcement, tax regulators, consumers, and patients, are all susceptible to an intensified risk of the vulnerability to the deadly virus, due to the presence of huge cash sales.

However, there is ambiguity in its fate in the Republican-majority Senate, despite the passing of the HEROES Act by the Democratic-controlled House. The measure was called “a list of pet priorities” by the Senate Majority Leader, Mitch McConnell, stating no urgency of immediate action.