The Toll of Coronavirus on the Hemp Idustry
As the coronavirus pandemic keeps affecting businesses all over the world, Hemp Industry Daily launched an informal poll (concluded on May 8th, 2020) to understand how the lockdown and its social implications have affected farmers and entrepreneurs in the hemp and CBD realm. Hemp advocates reached out to lawmakers over the past weeks, demanding them for the inclusion of hemp farmers and businesses in the next round of federal funding.
The results
The partial results show that a rough 54% of the hemp and CBD businesses who applied for a Small Business Administration (SBA) ‘coronavirus’ loan are yet to discover whether they have been granted the loans.
Ten percent of respondents received a Paycheck Protection Program loan and 7% got an Economic Injury Disaster Loan. 29% declare they applied for loans, but that these were either denied (12%) or, possibly even worse, that their loans were left unfulfilled (17%).
Although hemp became a legal crop thanks to the 2018 Farm Bill, it took months for federal financial institutions to issue guidance to banks, and many hemp industry members are still having trouble getting banks to work with them. Industry members had been vocal about the frustration of being excluded from the small-business loans deployed via the CARES Act, despite their businesses being as legal as any other, declared Hunter Buffington, executive director of Colorado’s Hemp Feed Coalition, to Hemp Industry Daily. According to Buffington, farmers and entrepreneurs are still being denied banking, loaning and insurance services.
An uncertain future
The new federal relief bill follows the $349 billion allotted to the Small Business Administration (SBA), within the original CARES Act, to cover forgivable loans. Soon after the CARES Act was finalized and the SBA began distributing loans, members of Congress urged the SBA to provide farmers access to these funds, as legislation mandated. However, the SBA did not follow through. In the current state of affairs, farmers and entrepreneurs remain uncertain about whether they will have capacity to employ people on their farms in the upcoming season.
