Earlier this week, MassRoots obtained a loan under the Paycheck Protection Program (“PPP”), which has been critical to ensuring our employees are paid their regular salaries so they, in turn, have the money they need to support their families, cover medical bills, and pay rent. We believe that all cannabis-related businesses, both plant-touching and ancillary, should be able to obtain PPP loans in order to support the hundreds of thousands of employees that comprise the regulated cannabis industry.
Paycheck Protection Program Equality
We’re asking our supporters, both individuals and businesses, to take the following steps to raise awareness and help cannabis businesses obtain equal access to PPP funding:
- Tweet the reasons you support #PPPEquality to @realDonaldTrump, @PressSec and your Senators and Congressmen.
- Email the White House and President Trump’s campaign in support of #PPPEquality at [email protected] and [email protected].
- Call the White House at 202-456-1111 and your Senators and Congressmen in support of equal access to PPP funding.
- If you’re employed in the cannabis industry, please record a video testimonial on how PPP funding would impact your life. You can submit it here or Tweet it, tagging @realDonaldTrump, your Senators and Representatives, and using #PPPEquality.
- Post on Instagram, tagging the White House and your representatives, using #PPPEquality on the reasons why you support cannabis businesses having equal access to PPP loans.
Why is structural reform necessary?
When the U.S. federal government signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law on March 27, 2020, one of the measures included in the bill was the Paycheck Protection Program. The PPP is designed to help small businesses and their employees survive during the stay-at-home orders and trying times of the pandemic, which is affecting businesses from all markets.
The PPP website describes the initiative as:
“An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis,” and “a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.”
While cannabis remains illegal at the federal level, under the Controlled Substances Act, and the new law denies money from the CARES Act to businesses that are federally illegal, these businesses are not operating illegally at the state level. They are tightly regulated by the individual states.
Law-abiding, regulated cannabis businesses, whether plant touching or ancillary, and their employees should be granted the same access to government assistance as any other legally-operating business.
Now is the time to tell the U.S. government that you think the Paycheck Protection Program should be expanded to include cannabis businesses. Stand up for #PPPEquality with us and all of the other small businesses that make-up the regulated cannabis industry in the United States.
A coalition of the top financial regulators in 13 states is demanding congressional action to protect banks that serve marijuana businesses.
In a letter sent to congressional leaders late last week, the regulators stressed that conflicting state and federal cannabis laws have inhibited economic growth, created confusion among state banks and credit unions and jeopardized public safety.
“It is incumbent on Congress to resolve the conflict between state cannabis programs and federal statutes that effectively create unnecessary risk for banks seeking to operate in this space without the looming threat of civil actions, forfeiture of assets, reputational risk, and criminal penalties,” the regulators wrote.
“While Congress has taken some action, such as the Rohrabacher amendment prohibiting federal funds being used to inhibit state medicinal marijuana programs, this has been an impermanent approach that requires a permanent resolution.”
Finance officials from Alaska, Connecticut, Hawaii, Louisiana, Michigan, Montana, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Utah and Washington State signed the letter.
One of the factors that prompted the letter was Attorney General Jeff Sessions’s decision earlier this year to rescind the Obama-era “Cole memo,” which offered some enforcement guidelines for federal prosecutors when it comes to marijuana laws. Rescinding the guidance led to “uncertainty about banks’ ability to serve this industry without running afoul of federal statutes,” the regulators wrote.
The letter also recognized that this coalition is not alone in its demand for clarity around banking and cannabis policy.
In June, a bipartisan group of 12 governors called on lawmakers to pass the STATES Act, a bill that amends the Controlled Substances Act to create an exemption for state-legal marijuana activity. That bill would effectively protect banks dealing with cannabis businesses.
“Our states have acted with deliberation and care to implement programs through thoughtful and comprehensive legislation and regulations,” the governors wrote. “Our citizens have spoken, we are responding. We ask that Congress recognize and respect our states’ efforts by supporting and passing the STATES Act.”
Confusion in the finance industry over marijuana policy appears to be coming to a head in the United States. As federally backed banking institutions continue to reject clients who deal in the marijuana industry, more businesses are turning to a handful of institutions that are willing to serve cannabis growers, processors and retailers—but the regulators said that’s only a temporary solution.
One example of the consequence of state and federal policy conflicts was recently reported by Marijuana Moment. A candidate running for a Florida agricultural commission seat was told that her Wells Fargo account would be closed after the bank discovered donations from “lobbyists from the medical marijuana industry.”
“A majority of states now have medical marijuana programs and it has become increasingly necessary to craft policy to respond to emerging challenges in this rapidly growing industry,” the new letter from financial regulators concludes. “We must work together to look for solutions rather than avoiding this challenge and ignoring the new policy landscape.”
See the original article published on Marijuana Moment below:
State Financial Regulators Push Congress To Fix Marijuana Banking Problems
More than 200 cannabis industry leaders from almost half the states in the country are converging this week on Capitol Hill to tell lawmakers it’s time to modernize federal marijuana laws.
As part of the National Cannabis Industry Association’s (NCIA) lobby days, taking place Tuesday and Wednesday, marijuana business owners will hold at least 200 separate meetings with U.S. House and Senate offices. They are seeking support for a number of far-reaching bills that would limit or end the federal government’s interference with state cannabis laws and allow state-legal businesses to use banking services and be taxed more fairly.
Members of Congress from both parties spoke at a press conference hosted by the group outside the Capitol on Wednesday.
Following last year’s NCIA lobby days, several key pieces of marijuana legislation saw substantial upticks in the number of lawmakers signing on as cosponsors.
For example, one key concern for NCIA members is a bill to allow cannabis businesses to access banks. Within a little over a month from the 2017 lobby days, 18 new House members joined as cosponsors. Three of those signed up right away, on the first day of NCIA’s event.
The legislation, which is still pending, now has 90 cosponsors, the most of any standalone piece of marijuana reform legislation in history. Similar banking legislation filed in 2015 only garnered a total of 39 cosponsors by the end of the 114th Congress.
Companion marijuana banking legislation was filed in the Senate the day before NCIA’s activists took to Capitol Hill for the 2017 lobbying meetings. The initial cosponsor list of eight senators has steadily risen to a current 16. The earlier version of that bill closed out the 114th Congress with only 11 cosponsors.
Another priority for NCIA members is scaling back a federal law, known as 280E, that disallows them from taking tax deductions that are available to businesses in other industries. Legislation to repeal that provision’s application to state-legal cannabis operators got 12 new cosponsors within two months of the group’s last constituent lobbying effort. It now has 44 lawmakers signed on. An earlier version only got 18 cosponsors altogether.
On the Senate side, current companion legislation now has six cosponsors, one of whom signed on within days of NCIA’s last lobby days, whereas the previous Senate 280E bill only got four cosponsors by the time the 114th Congress adjourned in early 2017.
It is likely that these bills, as well as others that NCIA is targeting, will see additional cosponsor bumps after this week’s Capitol Hill effort, especially since more state legal marijuana programs have since come online or expanded since last year’s lobby days. As a result, more members of Congress now represent more constituents who are directly impacted by current policy.
The stepped-up effort from marijuana business owners comes as several other pieces of cannabis legislation are drawing record support from lawmakers.
A bill filed by Senate Majority Leader Mitch McConnell (R-KY) to legalize hemp, for example, already has more than a fifth of the body signed on as cosponsors after little more than a month since it was introduced. That includes Minority Leader Chuck Schumer (D-NY), who typically doesn’t team up with his rival party leader on many issues.
Wide-ranging racial justice legislation filed this month by members of the Congressional Black Caucus includes a provision to remove marijuana from the Controlled Substances Act. It already has 44 cosponsors, giving it the most support of any cannabis descheduling bill ever introduced in Congress.
A Senate bill that would deschedule marijuana and withhold federal funding from states with discriminatory enforcement now has five cosponsors, several of whom are expected to run for the 2020 Democratic presidential nomination.
For now, businesses owners who are directly impacted by outdated federal cannabis laws are making their voices heard on Capitol Hill at a time when a growing number of lawmakers from both parties are already signing on to marijuana bills at a record pace.
Stay tuned to Marijuana Moment’s legislative tracking tools to see how many more senators and representatives cosponsor key cannabis bills in the coming weeks.
(Disclosure: Marijuana Moment’s publisher helped to write and edit a new NCIA report on the impact of state marijuana laws.)
See the original article published on Marijuana Moment below:
Marijuana Business Owners Rally On Capitol Hill As Cannabis Bills Gain Momentum
The U.S. Small Business Administration issued guidance earlier this month clarifying that marijuana businesses — and even some firms that don’t touch the plant but serve those in the cannabis industry — cannot receive aid in the form of federally backed loans.
“Because federal law prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity,” the new memo says. “Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.”
The new document details the type of marijuana-related businesses that it says are “ineligible” to participate in the agency’s loan programs:
(a) “Direct Marijuana Business” — a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law where the applicant business is or will be located.
(b) “Indirect Marijuana Business” — a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana. Examples include businesses that provide testing services, or sell grow lights or hydroponic equipment, to one or more Direct Marijuana Businesses. In addition, businesses that sell smoking devices, pipes, bongs, inhalants, or other products that may be used in connection with marijuana are ineligible if the products are primarily intended or designed for such use or if the business markets the products for such use.
(c) Hemp-Related Business” — a business that grows, produces, processes, distributes or sells products purportedly made from “hemp” is ineligible unless the business can demonstrate that its business activities and products are legal under federal and state law. Examples of legal hemp products include paper, clothing and rope.
The new memo, issued by SBA Administrator Linda E. McMahon, is intended to provide clarification on a longer document laying out rules for loan programs that SBA issued earlier this year.
The policy document also specifies that SBA borrowers can’t rent office space to marijuana-related businesses.
“For consistency with the changes identified above regarding marijuana-related businesses, Lenders are advised that, during the life of the SBA-guaranteed loan, a borrower may not lease space to the ineligible businesses described above because the collateral could be subject to seizure and because payments on the SBA loan would be derived from illegal activity,” McMahon wrote. “If a borrower does lease to an ineligible marijuana-related business, SBA District Counsel should be consulted to determine what action should be taken.”
About 200 miles east of Seattle, four young entrepreneurs are living the startup life in many of the same ways as Silicon Valley technologists. These guys aren’t writing code or creating the next 3d printing technology though. Instead they are wiring greenhouses, calculating nutrient formulas, and tweaking hash oil extraction methods.
The four twenty-something entrepreneurs have diverse backgrounds in politics, engineering, physics, and economics, but as so many students do, bonded smoking pot in college. After graduating from school and dabbling in the corporate life, the team converged in Washington on to use Miles and Connor Deife’s family farm for a large scale marijuana grow.
It took some convincing to get the family on board with the idea, as Miles and his brother Connor’s grandfather had once threatened their inheritance if they even smoked weed. As it turns out Grandpa Deife had a soft spot that you probably won’t find shocking; money. Miles and Connor’s mother was the one who pitched the idea to their grandpa, all but guaranteeing a return on his sizable investment.
The foursome got the ball rolling with $350,000 in capital and a 20 acre purchase of the family land. They submitted their paperwork to acquire three Tier 3 licenses (allowing for 21,000 feet of marijuana grows) back in December of 2013 and waited for their approval. Meanwhile they were each honing in on the task ahead, combing through every grow regulation, studying plant physiology, and fine tuning their leadership skills.
The team rolled up their sleeves and built out the grow facility by hand. It took the better part of a year to complete, working on things like constructing security fences, building the greenhouses, and wiring the facility by hand. As with any startup the guys wore many hats, worked through the night, and figured it out as they went.
Now that their grow facilities are built and operational, the young startup is moving full steam ahead. The team is processing marijuana into hash oil and say that they can make $40,000 a day doing so. Even with the high overhead of $10,000 monthly electricity bills, the team expects to pay off their $350,000 investment plus interest in early 2015.
The four guys are currently still sharing a small farm house (more like a frat house) and pulling all nighters. Miles spends most of his days making deliveries across the state and has secured a contract to turn 4 tons of marijuana into hash oil concentrate in the coming year.
It seems that the teams startup approach to the pot farm and entrepreneurial spirit will soon pay off. Big time. Similar to the Silicon Valley of the early 90s these guys got in at the ground level, and now the sky is the limit. As Washington and a slew of other states begin expanding their marijuana programs, this will be one of many more success stories of young entrepreneurs to come.