Coronavirus stimulus money awarded to lucky few cannabis-related firms

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Will cannabis stimulus funding be granted to businesses operating in this controversial sector?

Bethan Rose Jenkins, Cannabis News Writer/Editorial

As of June 5, 2020, the Internal Revenue Service (IRS) had distributed 159 million coronavirus stimulus payments among residents of the United States. The $2 trillion federally-funded stimulus package enabled qualifying Americans to receive a one-time payment of up to $1,200; mainly by direct deposit and paper check.

However, the vast majority of cannabis business owners in the U.S. felt neglected when they discovered they wouldn’t be on the receiving end of a pay packet. Fortunately for a handful of companies involved in the legal weed sector approximately half a dozen the federal government’s Paycheck Protection Program (PPP) granted them between $3.5 million and $8.7 million. 

The government’s PPP is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law by President Donald Trump on March 27.

Which cannabis companies received stimulus funding amid COVID-19?

At the beginning of July, a government database was made public. Detailed in this database was information pertaining to the U.S. cannabis companies that bagged stimulus checks. According to insights from Law360 a legal news and analysis – PPP loans were approved for the following registered businesses:

  • Cannabis technology company MassRoots received $50,000
  • Cannabis compliance technology company Akerna Corp. received $2 million-$5 million
  • Cannabis consulting firm Canna – affiliated with Canna Advisors – received $150,000-$350,000
  • Cannabis investment research firm The Arcview Group received $150,000-$350,000
  • Hemp and cannabis staffing agency Hemp Temps received $350,000-$1 million
  • Marijuana Business Daily publisher Anne Holland Ventures received  $1 million-$2 million.

Stimulus funding rules prohibit cannabis companies from receiving money

Based on the rules outlined by the U.S. Small Business Administration, businesses that glean revenue directly from cannabis companies should not be included in the $2 trillion federal stimulus funding package. The Administration’s reason for this is that the cannabis plant remains an illegal Schedule I narcotic at the federal level and therefore traditional banking services are not provided to businesses in this industry.

The industry could benefit from stimulus funding, however. The findings of a survey recently conducted by Leafly and the National Cannabis Roundtable revealed that tens of thousands of American jobs would be saved if stimulus funds were awarded to them; 85 percent of companies would be able to salvage jobs if they had access to stimulus money, whereas 30 percent of cannabis business owners would be forced to shutter their businesses if they aren’t granted any financial relief.

A primary goal of the PPP loans that were awarded to the aforementioned cannabis companies was to assist business owners in covering the costs of necessities amid the COVID-19 pandemic; e.g. payroll, utilities, rent and mortgage interest.