WASHINGTON–Rep. David Scott (D-GA), who chairs the House Agriculture Committee, said the 2023 farm bill should address the barriers small businesses and Black entrepreneurs face when trying to start legal cannabis companies under state law.
Those barriers include high startup costs, underfunded state social equity programs and the lack of access to banking, according to Amber Littlejohn, executive director of the Minority Cannabis Business Association, who testified before Scott and other members of the House Financial Services Subcommittee on Consumer Protections and Financial Institutions.
“Here we are, the fastest growing agricultural product, between hemp and cannabis,” said Scott during the virtual hearing. “We're also going into our farm bill. We've got to address this issue. We can no longer hide it.”
Provisions that would remove the federal prohibitions on providing financial services to cannabis-related businesses have the strong support of credit unions, which continue to hold out hope a resurrected SAFE Act will be included as an amendment to other legislation in this Congress.
Congress has previously used the legislation that reauthorizes agriculture and nutrition programs to address the legal status of cannabis. The 2018 farm law made it legal to grow hemp, derived from the cannabis plant, as an agricultural crop, Roll Call reported.
According to Roll Call, during the hearing Scott pressed Littlejohn on the barriers to entry that small and minority farmers face trying to get into the cannabis industry.
Falling Short
Littlejohn said state-sponsored social equity programs designed to help minority communities harmed by drug policies in the past get a foothold in the cannabis industry have fallen short. Only 15 of the 37 states with legal recreational or medical use marijuana programs have equity programs, and none of those are well-funded enough to defray the high startup costs, Littlejohn said, according to Roll Call.
“What we've seen is they’re rolling out these equity programs, but the funding is not there,” Littlejohn said. “There is a clock ticking on the amount of time that people have to get their businesses up and running.”
Roll Call noted that in Scott’s state of Georgia, would-be cannabis business owners must pay $200,000 just to apply for a license to grow or process the substance, Littlejohn said. Only four African Americans applied for licenses, and the state approved none of them, she said.
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