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H.R. 6602: Emergency Cannabis Small Business Health and Safety Act


Should the state-legal businesses be eligible for federal loans, if they’re technically illegal under federal law?

Context

Eleven states plus the District of Columbia have legalized recreational marijuana. Yet while marijuana businesses and companies are now thriving on a state level there, the drug remains illegal on a federal level.

This legal grey area can create challenges. For example, most banks are unwilling to work with marijuana businesses, fearing potential reprisals.

In the past month, it also means state-legal marijuana businesses were among the few categories excluded from government loans issued during the covid-19 pandemic, including the recent $2 trillion CARES Act and its subsidiary Paycheck Protection Program (PPP).

Another category of business initially excluded included small casinos and gaming establishments, but the Treasury Department later reversed that decision. Now some are hoping for a similar reversal on the current exclusion of marijuana businesses.

What the bill does

The Emergency Cannabis Small Business Health and Safety Act would allow marijuana businesses to become eligible for CARES Act funding, as a result of the pandemic.

It was introduced in the House on April 23 as bill number H.R. 6602, by Rep. Earl Blumenauer (D-OR3).

What supporters say

Supporters argue the bill permits economic relief that virtually every other legal business in America is potentially eligible for.

“As Congress seeks to provide relief to small businesses across America, chief among those being left out are state-legal cannabis businesses that are essential to communities and have met the demands of this crisis,” Rep. Blumenauer said in a press release. “We should include state-legal cannabis in federal covid-19 reponse efforts.”

“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.”

What opponents say

Opponents counter that marijuana businesses don’t need the economic help right now. Indeed, legal marijuana sales are up during the pandemic, one of the only sectors of increasing economic activity increasing during this period, as many people feel a need to “escape.”

In fact, in some states including Michigan, marijuana businesses have been designated among the few “essential businesses” permitted to remain open to in-person customers.

“They definitely have a lot of hubris to say they need money at a time when they’re seeing record sales. It’s laughable that they’re asking for it,” Kevin Sabet, president of Smart Approaches to Marijuana (SAM), told The Hill. “I think it’s just a pattern for them pushing boundaries … as they can.”

Odds of passage

The bill has attracted 16 bipartisan cosponsors: 15 Democrats and one Republican, Rep. Don Young (R-AK0).

It awaits a potential vote in the House Small Business Committee. Odds of passage are low in the Republican-controlled Senate.

A similar bill that would allow marijuana businesses to access banking passed the House in September, with a majority of House Republicans opposed by 91 to 102. The bill has not been taken up in the Senate.

Last updated Apr 29, 2020. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Apr 23, 2020.


Emergency Cannabis Small Business Health and Safety Act

This bill makes a cannabis-related legitimate business or service provider eligible for specified Small Business Administration (SBA) programs established in response to COVID-19 (i.e., coronavirus disease 2019), and it exempts the SBA from liability under federal laws or regulations solely for providing a loan or guarantee to such a business or service provider.