Over 30% of Cannabis Businesses May Permanently Close If No COVID-19 Stimulus Relief
According to a new survey conducted on state-licensed cannabis companies, 1 in 3 such businesses may permanently close and not receive any federal COVID-19 relief. This would also mean all facets of the weed industry that rely on various provided services such as testing and tracking, cultivation of plants, distribution, packaging, product marketing of weed would also be affected. The national survey was conducted on 483 cannabis businesses and conducted for almost 3 weeks between the end of April and the first week of May. Just over eighty percent of the surveyed companies said they would have to start firing employees if they don’t get a federal bailout like other businesses in the US did. The National Cannabis Roundtable (NCR), which is a trade association fighting for the legalization of marijuana, and Leafly, together conducted the survey.
243,000 People Hired in the Cannabis Industry Back in February
The cannabis industry in the US hired 243,000 people back in February, giving them entrance to a $10.7 billion market, says a Leafly Cannabis Jobs Report. However, since then, 58% of pot businesses have decided to operate with their staff significantly reduced, which is a problem in all US industries, not only the cannabis one. Here’s what Saphira Galoob, the executive director of NCR, had to say about this:
“Before this crisis began, the cannabis industry represented the fastest growing jobs market in the US, despite restrictions on access to banking services.”
Marijuana Business Can’t be Conducted with Banks
While there’s a proposed federal bill saying banks should offer business accounts, loans and credit loans to marijuana operators, these marijuana businesses cannot work with big banks because marijuana is federally outlawed. Cannabis companies paid out over 4 Billion in federal taxes just 3 years ago. These taxes paid by weed and cannabis companies may provide much needed funds towards losses with the US Congress approving yet another COVID-19 stimulus relief package worth trillions of dollars.
In the case that one third of the American weed industry gives up on conducting business altogether, these losses are going to be drastically felt in consumers personal incomes, transactions, tax revenue and even employment. As an irony, 8 states have deemed the marijuana businesses to be essential during the Coronavirus pandemic, so dispensaries or cultivation sites wouldn't be closed. Some other of the essential businesses included are pharmacies, grocery and gun shops. However, ironically the US government and the Republicans in the Senate in particular think the weed industry shouldn’t receive federal relief even though they pay taxes. It’s good to know that there are some Democrats fighting to include some of the cannabis state-licensed companies in this next federal stimulus relief funding round.