Representatives Troy Carter and Guy Reschenthaler have introduced the Capital Lending and Investment for Marijuana Businesses Act (CLIMB Act) to help improve access to services for legitimate cannabis-related businesses.
This legislation would give US cannabis companies access to lending and grant opportunities from both financial institutions and government agencies.
The US cannabis industry has been growing at a rapid rate, but due to the federal prohibition of cannabis, cannabis businesses in the US are currently struggling to access capital through traditional routes.
Federal prohibition also prevents US cannabis businesses from listing on US exchanges. However, global companies are currently permitted to list, giving them an unfair advantage over US cannabis businesses to secure critical capital.
Read more: MORE Act moves forward in US sparking hopes for federal legalisation
The CLIMB Act aims to permit access to community development, small businesses, minority development and financial institution capital for investment and financing of cannabis-related businesses.
This includes business assistance, such as access to financial services, insurance/surety products, debt or equity capital, accounting services and more, as well as safe harbour for businesses to list on stock exchanges.
If passed, the bill could generate an estimated $22.7bn in tax revenue through increased investment.
Congressman Troy Carter stated: “The bipartisan CLIMB Act is a huge opportunity to bring equity and equal opportunity into our nation’s burgeoning cannabis industry.
“From my work on the Small Business Committee and by working directly with small, minority, and veteran-owned cannabis businesses, it’s clear that access to capital remains one of the biggest barriers to entry and to success in the industry.
“By bringing symmetry into the business ecosystem with the CLIMB Act, we can help communities that have long been harmed by the criminalisation of marijuana move to now be leaders in the business sphere – and that’s what the American Dream is all about.”
It has been estimated that the CLIMB Act would bring in an expected $47.3bn in investments to support the growth and stability of US cannabis operators and ancillary businesses within the first year, and it is also projected to create 600,000 jobs by giving these businesses access to capital.
Reschenthaler also stated: “American cannabis companies are currently restricted from receiving traditional lending and financing, making it difficult to compete with larger, global competitors.
“The CLIMB Act will eliminate these barriers to entry, and provide state legal American cannabis companies, including small, minority, and veteran-owned businesses, with access to the financial tools necessary for success.
“This bipartisan legislation will boost the economy, create jobs, and level the playing field for American businesses.”
First vice chair of the National Cannabis Roundtable and CEO of Ilera Holistic, Dr Chanda Macias, stated: “The CLIMB Act will unleash the full potential of the American cannabis industry. This legislation will ensure that American cannabis businesses can access the lending and grant opportunities that other domestic industries currently enjoy, and it will make it easier for veteran, minority and women-owned businesses to compete by giving them access to a broad range of economic opportunities.
“I want to thank Congressmen Troy Carter and Guy Reschenthaler for introducing this important legislation.”
National Cannabis Industry Association CEO Aaron Smith, commented: “Small cannabis businesses cannot effectively compete in the highly regulated and complex cannabis industry without access to capital and lending services.
“This bill is a much-needed reform that will help level the playing field for main street cannabis businesses across the country.”
The bill could help to transform the US cannabis industry if it passes alongside the SAFE Banking Act, which has been designed to allow cannabis businesses access to traditional banking services, the HOPE Act, which aims to expunge past cannabis-related convictions, and the MORE Act, under which cannabis would be removed from the Controlled Substances Act’s list of scheduled substances and would remove criminal penalties for individuals manufacturing, distributing, or possessing the plant.
The SAFE Banking Act, however, which was last year included in the National Defense Authorization Act (NDAA) and then subsequently removed, has now been stalled in the Senate for sixth time.