In an interesting turn of events considering the long legal history of the cannabis crop in the United States, the federal government is poised in 2020 to hurry relief to struggling hemp manufacturers that will likely be hit hard by the coronavirus pandemic. However, the same benefits do not extend to CBD growers or sellers because of government red tape.
The news comes as a source of welcome relief to small hemp businesses around the country who were not sure whether their industry would receive the same attention from lawmakers concerned about the COVID-19 pandemic as other more established industries like the airlines and the banks. It comes as a frustrating development, though, for CBD businesses that feel entitled to their own bailout.
Here is a brief rundown of how much small hemp and CBD businesses might expect to get in relief from the authorities during the national lockdown.
What the Industry Looked Like Before COVID-19
Before the latest coronavirus outbreak, the economy was running smoothly. Respectable GDP growth year on year since the Great Recession of 2008 ensured a steady consumer demand for increasingly popular CBD. Heavy investment into commercial CBD operations meant plenty of cash in hand for expansion, which is exactly what small CBD businesses were busy doing before the pandemic forced the national economy to a screeching halt.
CBD business prior to the pandemic was so good, in fact, that many analysts called it the “cash crop of the century”.
Now, with the sudden downturn, many small businesses that were so optimistic about the future are left wondering how they can even manage their businesses through the crisis.
Fortunately, help from Uncle Sam for some appears to be on the way.
Coronavirus Preparedness and Response Supplemental Appropriations Act (HR 6074)
HR 6074 became law on March 6 after deliberations in Congress. As part of the sweeping effort to combat the economic ravages of COVID-10, a $20 million emergency grant was offered to the US Small Business Administration, also known as the SBA.
CBD growers were left out in the cold, however. The bill drew fire from cannabis advocacy groups like NORML because the government administration cited its policy of excluding cannabis growers and sellers from the list of eligible businesses because marijuana remains a Schedule 1 narcotic per federal guidelines, regardless of its legal status in individual states.
Small marijuana and CBD businesses have pleaded with the federal government to reverse course and offer support during the pandemic.
Support From U.S. Small Business Administration
The federal government’s disaster loan relief offers interest and principal-free loans to legal small businesses that will be affected by the economic downturn. However, so far, the loans have not been extended to CBD businesses.
The COVID-19 Economic Injury Disaster Loan Application is a streamlined process to deliver much-needed cash into the hands of small business owners as they try to manage solvency in the troubled economic waters of early 2020.
Another program of the SBA, the Express Bridge Loan Pilot Program, enables quick access of amounts up to $25,000 for businesses that have an existing relationship with the SBA.
Industry advocates have repeatedly warned the federal government that if it excludes the industry, which employees 240,000 people in the US, then serious economic ramifications will arise.
So far, federal lawmakers have not budged in their anti-marijuana and anti-CBD stance. Stay tuned for the latest developments.