Cannabis-related firms again face hurdles in qualifying for financial relief under the newly enacted $1.9 trillion coronavirus stimulus package, but the door has opened wider for hard-hit companies, especially small and economically disadvantaged businesses.
The American Rescue Plan Act of 2021 (ARPA) includes three programs worth exploring, marijuana industry experts said.
Two offer billions of dollars in loans and grants, while another provides tax credits:
- State Small Business Credit Initiative: More than $10 billion is being funneled to states to support small businesses, economically disadvantaged businesses and micro-businesses. Some experts believe state rather than federal rules should apply, potentially opening up funds for marijuana businesses operating in state-legal markets.
- Employee Retention Credit: Requirements for these payroll tax credits have been relaxed some, and credits now could be in play for cannabis-related firms that have experienced a year-to-year drop in receipts of 20% or more (the previous standard was 50%).
- Payroll protection loans and grants: The same strict requirements persist from the two previous economic stimulus rounds, but experts note that banks, which issue the loans and grants, ultimately determine whether a business qualifies.
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