As industries start to total their respective losses during the COVID-19 pandemic, legal representatives of cannabis businesses are hoping their still-growing industry isn’t taking a hit.
But Charles Gormally, who co-chairs Brach Eichler LLC‘s cannabis law practice, said one of the major issues for the industry is that it’s caught in a struggle to access banking services. And, although pending federal legislation would help that cause, current restrictions on bankers mean cannabis businesses missed out on coronavirus relief programs.
“They just didn’t have access to these Paycheck Protection Program loans,” he said. “They’ve had to weather this storm.”
There’s some debate about how much those producing and selling medical marijuana products in New Jersey — and recreational products in other states — would need the assistance introduced in late March to help small businesses pay wages and rent during the downturn brought by COVID-19’s spread.
While some cannabis investors have seen the world-historic event as a buzz kill, Gormally said he’s heard anecdotally that business is possibly better than ever. Stay-at-home orders and increased anxiety levels might be leading to a high demand for recreational and medical marijuana, he said.
But the effects from COVID-19 are mostly an unknown for the fledgling industry — one that governments have hoped would be a certain boost for local economies now facing an economic morass.
“What the pandemic environment reinforces is the fact that all state governments and municipalities are under tremendous pressure to develop new revenue sources,” Gormally said. “And cannabis has been hoped to provide that.”