Short of reopening, some lawmakers eye cannabis business loans
Photo | Flickr | Ajay Suresh
The Massachusetts State House
It would be a "damn shame" if instead of allowing marijuana companies to resume operations in Massachusetts the state had to establish a forgivable loan fund for an industry that doesn't qualify for federal aid, the Senate chair of the Cannabis Policy Committee said Tuesday.
Sen. Sonia Chang-Diaz testified in support Tuesday morning of a bill (S 2643) that would create a Massachusetts Paycheck Protection Program for businesses ineligible for the federal program, which awards loans to small businesses that can be forgiven and converted to grants if a business maintains its payroll.
Though the Jamaica Plain Democrat supports the "spirit" of the bill, Chang-Diaz said her preferred method of helping small cannabis companies is for Gov. Charlie Baker to allow non-medical marijuana businesses to re-open.
"I think it would be a damn shame, honestly, if we have to end up going there as a state because it would be a self-inflicted wound. The adult-use, recreational marijuana industry is one that ... stands at the ready to meet the needs of the consumer public in a safe way on par, if not even under greater public health strictures, than their peers in the alcohol industry and in the restaurant industry," Chang-Diaz said during a virtual hearing of the Joint Committee on Community Development and Small Business.
"It is well within our reach as a commonwealth to allow these retailers to reopen on a by-appointment-only basis, on a curbside pickup basis, serving only Massachusetts ID holders," she said.
Since Baker ordered the closure of all non-essential businesses starting March 24, only registered patients in the state's medical marijuana program have been able to buy marijuana legally. The governor has resisted calls to follow the lead of other states and allow recreational operations -- not just sales, but everything else that goes into producing marijuana and marijuana products -- to resume as an essential service. He has expressed concern about out-of-state consumers traveling to Massachusetts.
"To use a term of art, I just think it's bananas that we are not allowing these retailers to open again in a way that is safe, that is controlled and that can serve the greater needs of the commonwealth in this time of emergency," Chang-Diaz said.
Asked Tuesday afternoon about the possibility of non-medical marijuana businesses being allowed to reopen with restrictions like limiting sales to Massachusetts residents or requiring customers to make appointments ahead of time, Baker said he would leave that type of decision up the re-opening advisory group Lt. Gov. Karyn Polito is leading.
"I think those folks are coming in to see the advisory board soon," he said.
Chuck Saba, the head of beWell Organic Medicine, described for the committee what it's like to be in a position of contributing to the state and federal government through taxes only to be denied help when his business takes a hit due to the pandemic.
"Even though we are a legal LLC producing cannabis legally in Massachusetts, paying taxes to the state and federal government with a legal and valid payroll company, beWell and other cannabis legal facilities have no access to any of the federal emergency relief simply because of the nature of our business," he said. "We are legal, but we are not treated like other legal businesses. This leaves us and our team members extremely vulnerable."
The bill (S 2643) filed by Methuen Sen. Diana DiZoglio is not specific to the cannabis industry, but seeks to provide a source of aid to many of the Massachusetts businesses that were denied federal funding.
"It is absolutely something that is focusing on all small businesses that may have an issue obtaining those benefits from the federal government," DiZoglio, who chaired Tuesday's virtual hearing, said. "The PPP at the state level would be something that is meant to be helpful to all small businesses that are ineligible for federal benefits for whatever reasons."
Saba and other marijuana business operators said they are small businesses just like so many others that are able to access the federal aid. Ellen Rosenfeld, president of CommCan, detailed for the committee the payments her company makes to its host communities -- Millis, Southborough and Medway -- and what it pays to the state and federal government in taxes and fees.
Rosenfeld said her company in 2019 paid $500,000 to the federal government, $420,000 to the state and $430,000 to its host towns. If her company could get a PPP loan, it would be for about $400,000, she said.
"That is less than each entity -- the feds, the state and the towns -- received from CommCan in 2019. We cannot borrow money. We pay our employees more than minimum wage and we provide benefits. We have implemented every safety protocol that has been suggested, mandated and warranted. We have allowed our employees to self-quarantine for any reason. They have told us that they feel protected and have expressed their gratitude for being employed during this time," she said. "We will continue to do all of those things ... but it would be a lot easier with a little help."
Cannabis businesses are just one category that do not qualify for federal aid, but representatives from a variety of other sectors testified in favor of DiZoglio's bill Tuesday.
"The chamber of commerce, as a 501(c)(6), was not eligible for the funding that was put forward by the federal government," Mark Iannuccillo, vice president of the Greater Newburyport Chamber of Commerce, said. "The chamber has found itself now in the situation where we have collected about 10 percent of our membership dues, all of our events have come to a grinding halt, and the future of our organization remains uncertain."
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