Letter to the Hon. Richard Shelby, Vice Chair of the Senate Committee on Appropriations, the Hon. Cindy Hyde-Smith, Ranking Member of the Senate Appropriations Subcommittee on Financial Services and Government, the Hon. Chris Van Hollen, Chair of the Senate Appropriations Subcommittee on Financial Services and General Government, and the Hon. Patrick Leahy - Rosen Leads Colleagues in Calls to Provide Resources, Millions in Support to Nevada Small Businesses

Letter

Dear Chairman Leahy, Vice Chairman Shelby, Chairman Van Hollen, and Ranking Member
Hyde-Smith:
As you begin drafting the Fiscal Year (FY) 2022 Financial Services and General Government
Related Agencies Appropriations Bill, we respectfully request that you include report language
prohibiting the U.S. Small Business Administration (SBA) from denying loan applications for
the 7(a) Loan Guarantee Program, Disaster Assistance Program, Microloan Program, and
504/Certified Development Company Loan Program to legally operating cannabis small
businesses in states that have legalized cannabis sale and use.
Over the years, there has been a clear shift in public opinion supporting legalization of cannabis
in the United States. Most recently, Arizona, Montana, New Jersey, New York, and South
Dakota joined a long list of states and the District of Columbia, including Alaska, California,
Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and
Washington, that have legalized both the recreational and medicinal sale and use of cannabis. In
2020, states collected an estimated $3 billion in tax revenue from legal cannabis sales.1
However,
SBA's current policy excludes small businesses with "direct" or "indirect" products or services
that aid the use, growth, enhancement, or other development of cannabis from SBA-backed
financing. Consequently, small businesses in states with some form of legal cannabis must
choose between remaining eligible for SBA programs and participating in or doing business with
a rapidly-growing and legal industry.
The SBA's loan programs provide financial assistance in the form of loans and loan guarantees
to small businesses who cannot easily access capital. These include the 7(a) Loan Guarantee
Program, Disaster Assistance Program, Microloan Program, and 504/Certified Development
Company Loan Program. Currently, most banks are reluctant to serve even state-legal cannabis
businesses due to conflicts with federal law, meaning that these legally operating small
businesses often are forced to operate using only cash, potentially jeopardizing safety in order to
do business. SBA programs would be especially helpful to cannabis small businesses because
they would fill gaps left by the private sector and help mitigate the effects of the COVID-19
pandemic. Access to these SBA programs could ensure that small businesses -- including those
led by our minority, women, and veteran entrepreneurs -- support job creation and recover from
the COVID-19 pandemic.
We strongly support SBA making all of its loan programs available to all state-legal cannabis
small businesses. We, therefore, ask the Subcommittee on Financial Services and General
Government to include language in your forthcoming legislation to help extend SBA loan
programs to cannabis small businesses legally operating in states that allow the sale and use of
cannabis for medical or recreational purposes.
Thank you for your leadership in crafting this important appropriations bill, and for your
consideration of this request.