As the Coronavirus (COVID-19) scare escalates across the U.S., “critical” business owners in Colorado have been informed that they can continue operating. However, the eligibility criteria doesn’t include cannabis businesses in the scenic state. Since the plant is still a Schedule I controlled substance under federal law, cannabis stores in Colorado are exempt from the $2 trillion stimulus funding package.

As a result of the cannabis industry’s exclusion from the Coronavirus Aid, Relief and Economic Security (CARES) Act, dispensaries and other types of cannabis retail stores will not receive stimulus package funding to recover from the economic damage caused by COVID-19. Being exempt from the $2 trillion stimulus package has put many business owners in a difficult situation.

“Unfortunately, a large number of small businesses in Colorado are not eligible for these loans due to their involvement in the state-legal cannabis industry, which is a major employer and tax revenue generator in our state,” said Governor Polis, who sent a letter to Congress on Monday, April 13, urging them to provide financial aid to statewide cannabis businesses.

Colorado’s cannabis industry excluded from stimulus package: first wave of federal funding has been distributed 

On Wednesday April 16, Americans received the first round of payments from the IRS stimulus package. According to the language contained in the CARES Act, eligible individuals stand to receive $1,200, whereas couples can receive a maximum of $2,200. An additional $500 per child is also available. 

Before payments can be sent out to those who qualify, adjusted gross income (AGI) – featured on 2019 or 2018 tax filings – must be assessed. This data will be used to properly calculate the total amount of stimulus checks. The AGI can be determined by referring to line 8b of the 2019 1040 federal tax form or line 7 on the 2018 1040 tax form; it’s likely that some people won’t have completed their 2019 taxes, since the due date has been extended to July 15 because of coronavirus.

As many as a 150 million U.S. residents are expected to qualify for CARES Act funding, which can be sent via a direct deposit or a mail-delivered check. Those who receive the funding do not need to pay tax on it, nor should it be considered an advance on the individual’s normal tax refund; the money can be spent in the same way as cash.

Colorado’s cannabis industry excluded from stimulus package: Gov. Jared Polis wants to help cannabis businesses in Colorado

Although cannabis businesses in Colorado are missing out as a result of the COVID-19 outbreak, things could potentially take a different turn; if Governor Polis has his way. Polis recently delivered a letter to a member of the House Small Business Committee — Rep. Jason Crow, D-Aurora. 

The letter requested that the committee consider amending the CARES Act to include funding for cannabis businesses in Colorado. In addition to the retail stores/dispensaries and cultivation operations that will be affected by the lack of COVID-19 recovery funding, ancillary cannabis businesses could also struggle, said Polis. Examples of ancillary businesses that serve the cannabis industry include legal and consulting firms and equipment providers. 

“As you can imagine, there are hundreds of Colorado companies that fall into the latter category, from HVAC companies and lighting equipment suppliers to law firms and accounting firms,” Polis wrote.

The Governor of Colorado is not the only one who wants to help cannabis business owners gain access to federal funding COVID-19. Various advocacy groups are also pushing for Colorado’s cannabis industry to be included in the CARES Act. However, due to the ongoing Schedule I status of cannabis under the Controlled Substances Act (CSA), businesses actively operating in the industry are not eligible for inclusion in the Paycheck Protection Program; federal cannabis prohibition has deterred financial institutions from serving licensed weed companies.

“In an ideal world, Congress would include a provision in an upcoming bill guaranteeing that all state-legal cannabis businesses, direct and indirect, will be eligible for these loans. In the alternative, I hope that you can at least work with your colleagues to ensure that Indirect Marijuana Businesses will be eligible for the loans,” Polis urged Congress. 

It remains uncertain as to whether or not Colorado’s governor will be victorious in his efforts.