Many small business, including marijuana companies, have rushed to apply for paycheck protection during the COVID-19 crisis under the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act).
The first-come, first-served program totals about $350 million. It provides what amounts to a free loan to small businesses to help them weather the pandemic and retain their employees.
But by Thursday, the program – signed into law March 27 and administered by the U.S. Small Business Administration – had run out of money.
Top Democrats and Republicans in Congress are seeking an agreement to provide more money to the program, CNBC reported.
Which begs the question: Are marijuana businesses eligible for such funding?
Probably not, said Joshua Kappel, founding partner at Denver law firm Vicente Sederberg.
The new law specifically prohibits businesses that are illegal at the federal level – and companies that get revenue from such businesses – from accessing CARES Act money.
That means both plant-touching and ancillary companies are excluded.
But lobbying is underway to expand the program.
Kappel offers an overview on what you need to know about the CARES Act – including what to expect if you’ve already applied for funding.
For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.