During the Coronavirus pandemic, cannabis businesses have been deemed essential by 29 states and the District of Columbia. Cannabis businesses adjusted their standard operating procedures as necessary and implemented new policies to ensure employee, patient and customer safety.

Woman scientist tending to marijuana grow field

But what do these recent temporary changes mean for the marijuana industry in the long-term?

Marijuana is Mainstream

Cannabis was already becoming widely accepted prior to COVID-19; 47 states currently have adopted some form of medical cannabis, while 11 states have legalized adult-use. Being labeled as an essential service by regulators and lawmakers marked a major shift toward social acceptance.

Many state and local jurisdictions have relaxed existing restrictions by allowing curbside pick-up, home delivery and telemedicine appointments. So far, these decisions have received little opposition or controversy.

Emergency Cannabis Business Funding Reform

Federal lobbying efforts by cannabis organizations fell during the first quarter of 2020. However, after the latest COVID-19 relief bill passed, it was clear within the industry that it’s time to refocus on reform at a federal level. States have recognized the necessity of cannabis businesses, but they are currently not eligible to recieve federal stimulus funds.

Emergency Cannabis Small Business Health and Safety Act

Last week, Rep. Earl Bluenauer (D-OR), along with a group of bipartisan cosponsors, introduced the Emergency Cannabis Small Business Health and Safety Act in the House. Intended to be included with a fourth coronavirus relief bill, this bill would allow both direct and indirect cannabis businesses to qualify for COVID-19 disaster relief funding.

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The legislation also states that Small Business Administration (SBA) officials cannot be punished for dispersing business loans or funds to marijuana companies. These legislators not only see the importance of the services provided by cannabis companies, but also their contributions to the economy through employment and tax revenue.

Return to Black Market Marijuana

While the cannabis industry faces COVID-19 related economic challenges, so do patients and consumers. Black market cannabis has long provided cheaper, untested product, causing many legalized states to estimate that black market sales outweigh legal sales.

Patients and consumers on stricter budgets could mean that the black market may gain even more marijuana sales. Not only will cannabis businesses lose out on earnings, but these sales are untaxed.

Federal Marijuana Legalization

Prior to the COVID-19 pandemic, federal cannabis legalization was expected to make significant progress with the creation of several cannabis laws. The Secure and Fair Enforcement (SAFE) Banking Act, which would provide safe access to banking for marijuana businesses through financial institutions, passed in the House of Representatives with overwhelming support. However, the bill has yet to advance in the Senate.

Additionally, the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, the bill that would remove marijuana from the federal list of controlled substances, was likely to make it to the House of Representatives this year as well. While the pandemic has delayed advancement, it has amplified the need for legislation on a federal level.

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The Takeaway

The shutdowns required to slow the spread of COVID-19 do come with economic losses. If we look back on United States history, the end of another prohibition helped to finance economic recovery. The reverse of alcohol prohibition didn’t reverse the Great Depression, but it did provide significant funding toward public works projects, financial reforms and regulations. The cannabis industry has the potential to provide serious economic relief through generation of tax revenue and job creation, if legalized federally.

The future of the cannabis industry in the aftermath of the COVID-19 pandemic like many others is uncertain. Until that time, it is best to remain informed, compliant and optimistic whether you plan on starting a cannabis business or not.

Kali Rose (19 Posts)

Kali is one of Cannabis Legal Group’s Paralegals. She began legal career at the Law Offices of Barton Morris and Cannabis Legal Group in 2017 as an Administrative Assistant. In July 2018, she was promoted to Paralegal at Cannabis Legal Group. She earned an Associate of Applied Science from Terra State Community College in Fremont, OH and holds background in communications and marketing. Kali is responsible for client relations, managing attorney calendars, and works to ensure research and document support are carried out effectively and efficiently for our cannabis clients.


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