Senators Renew Push for Marijuana Industry Access to SBA Loans and Resources

A coalition of Democratic senators is urging a key committee to ensure that small marijuana businesses have fair access to federal Small Business Administration (SBA) loan programs and entrepreneurial development resources, which are available to other industries.

In a letter sent last month to the leadership of a Senate Appropriations subcommittee, the senators requested that provisions be added to the Fiscal Year 2025 Financial Services and General Government Related Agencies (FSGG) spending bill. These provisions would prevent the 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 businesses in states where cannabis is legalized.

Led by Senator Jacky Rosen (D-NV), the letter also asks that the legislation prohibit the SBA from excluding state-legal cannabis businesses from participating in or benefiting from its entrepreneurial development programs.

In their letter, the senators highlighted the significant shift in public opinion toward cannabis reform, noting that a majority of states have enacted some form of legalization, generating billions in tax revenue. Besides Rosen, the letter was signed by Senators Cory Booker (D-NJ), Jeff Merkley (D-OR), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Ed Markey (D-MA), Alex Padilla (D-CA), and Michael Bennett (D-CO).

“Currently, SBA’s policy excludes from its programs all small businesses that provide ‘direct’ or ‘indirect’ services related to cannabis,” the senators wrote. “This forces businesses in states with legal cannabis to choose between SBA financing and participating in a rapidly growing industry.”

This marks at least the third time Rosen has led such a request, though the language has yet to be included in any spending bill.

The senators emphasized that most banks are hesitant to serve state-legal cannabis businesses due to federal law conflicts, forcing these businesses to operate in cash, which poses public safety risks. SBA loan programs could bridge the gap left by the private sector and expand capital availability, particularly benefiting minority, women, and veteran business owners.

Senate leadership has discussed prioritizing a bipartisan bill to protect financial institutions working with state-licensed cannabis businesses, but resistance from key GOP members, including Senate Minority Leader Mitch McConnell (R-KY), poses challenges.

Rosen advocates for amending the Secure and Fair Enforcement Regulation (SAFER) Banking Act to include access to SBA services for cannabis businesses. She emphasized that SBA loan and entrepreneurship programs would support an industry that creates jobs, supports small businesses, and raises revenues in states with legal cannabis.

The new letter from Rosen and her colleagues calls for the inclusion of language in the upcoming legislation to extend SBA programs to cannabis businesses operating legally in states with medicinal or recreational cannabis laws.

Rosen also supported language in a recent federal marijuana legalization bill that proposes an SBA pilot program for intermediary lending to provide direct loans to intermediaries, who would then loan to startups and disadvantaged small businesses.

In a press release about the letter, Rosen stated, “Small businesses are the backbone of Nevada’s economy, which is why I’m leading efforts to cut through bureaucratic red tape that prevents them from accessing capital and working to secure the federal funding for resources they need to thrive.”