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Cannabis companies pay federal taxes but are shut out of small business loans

Different strains of cannabis are displayed for sale at the Harborside dispensary in Oakland, California, U.S., on Monday, March 23, 2020.
David Paul Morris | Bloomberg | Getty Images
KEY POINTS
  • Several legislators from both parties are pushing for the next round of SBA loans to include the cannabis industry.
  • April 20 (4/20) is traditionally the biggest sales day of the year for the cannabis industry.
  • After seeing strong sales at the start of state shutdown orders, some stores have seen a sales slump.

April 20 (4/20) is traditionally the biggest sales day of the year for the cannabis industry. But after seeing strong sales at the start of state shutdown orders, some stores have seen a sales slump.

Particularly hard hit are shops in states heavily dependent on tourists, or where only medical marijuana has been deemed essential, not recreational.

Sales in Colorado reportedly fell 21 percent in the second half of March, compared to a year earlier. In Nevada they fell 15 percent.

“Some businesses are running into choppy waters,” said Rep. Earl Blumenauer, D-Oregon.

However, these businesses cannot access federal aid because they are illegal in the eyes of the federal government. So Blumenauer and three colleagues from both parties are pushing for the next round of Small Business Administration loans to include the cannabis industry.

“There are a quarter of a million people working in state legal cannabis businesses, they pay almost $2 billion in taxes,” he said, adding that the industry actually pays a disproportionate amount in taxes “because the crazy federal government rules don’t allow them to deduct all their business expenses.”

Steve DeAngelo, co-founder of Harborside in California, a chain of four cannabis stores, said sales in the Golden State remain solid, for now.

“What’s happened here in California is many people who are dealing with issues like chronic pain, insomnia, anxiety, depression, acid reflux, a whole range of issues, turn to cannabis as a first line of defense as a wellness product,” DeAngelo said.

To Read The Rest Of This Article By Jane Wells on CNBC News

Published: April 21, 2020

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