Front view of the Capitol

Congressman Carter Introduces Bipartisan Cannabis Bill to Provide Access to Lending Services, Investments and Grants for State-Legal American Businesses

June 23, 2022
Press Release

 

WASHINGTON, D.C. – U.S. Congressmen Troy A Carter, Sr. (LA-02) and Guy Reschenthaler (PA-14) today introduced bipartisan legislation, The Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, to allow state legal American cannabis companies, including small, minority and veteran-owned businesses the ability to access critical lending and investment opportunities currently available to other domestic and regulated industries. The CLIMB Act offers protections to financial lenders and government agencies tasked with promoting economic growth for American businesses and communities, which will help level the playing field against larger, global competitors in the cannabis industry.

 

“The bipartisan CLIMB Act is a huge opportunity to bring equity and equal opportunity into our nation’s burgeoning cannabis industry,” said Congressman Troy Carter. “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 criminalization of marijuana move to now be leaders in the business sphere – and that’s what the American Dream is all about.”

 

“American cannabis companies are currently restricted from receiving traditional lending and financing, making it difficult to compete with larger, global competitors,” said Rep. Reschenthaler. “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.”

 

Due to federal prohibition, state legal cannabis operators do not have equal access to traditional lending and financing options as non-U.S. companies, which creates significant barriers to entry for American cannabis companies, including minority-owned and ancillary businesses.  Among other items, the CLIMB Act does the following:

  • Provides safe harbor for private financial institutions to offer lending services state-legal American businesses. Due to federal prohibition, a majority of American banks will not offer loans or lending options to small, minority and veteran-owned cannabis businesses.

  • Protects government agencies such as Community Development Financial Institutions (CDFI) and the Small Business Administration (SBA) and Minority Business Development Association (MBDA) from issuing grants and other sources of government funding. The CLIMB Act will allow entrepreneurs and small businesses to apply for funding to start and grow their business in the cannabis industry, particularly in areas most adversely impacted by the War on Drugs.

“The National Cannabis Roundtable is proud to support House Members Troy Carter and Guy Reschenthaler’s bipartisan Capital Lending and Investment for Marijuana Businesses Act,” said Saphira Galoob, Executive Director of the National Cannabis Roundtable. “The CLIMB Act is critical because it provides state legal American businesses with traditional funding and support mechanisms for this emerging industry, which other domestic industries currently enjoy. The more financing sources available to cannabis businesses the better, particularly for entrepreneurs, small and minority-owned businesses that may have otherwise face challenges in obtaining access to capital. This bill provides a suite of options including institutional investments, CDFI and MBDA protections that will create good jobs and ensure inclusive economic growth and stability.”

 

“Small businesses entering the cannabis industry face extraordinary challenges accessing capital,” said Michael Bronstein, President, American Trade Association for Cannabis and Hemp. “By creating funding avenues through the Minority Business Development Agency and Community Development Financial Institutions, as well as providing avenues for institutional investment, the cost of capital will continue to decrease, and the opportunity of the United States cannabis economy will become more inclusive and within reach for the many not just the few.”

 

“CLIMB offers imperative financial access for women and minority entrepreneurs in cannabis,” said Gia Morón, President, Women Grow. “While SAFE Banking presents a security harbor for cash deposits, that only addresses one critical role in business banking. Women and minority owned enterprises in cannabis continue to face lack of access to lending, grants, and investment options. CLIMB proposes vital financial tools that will work through MBDA and CDFI to support entrepreneurs in our communities as they aim to scale their businesses.”

 

“The CLIMB Act is sound policy and will provide long-awaited critical financial support for small, minority and women-owned cannabis businesses,” said Roz McCarthy, Founder and CEO of Minorities 4 Medical Marijuana. “M4MM is grateful for the  bipartisan leadership on this issue, and encourages congress to work together and advance this key piece of cannabis reform legislation.”

 

“As a veteran and executive in the cannabis industry, I welcome the opportunities that The CLIMB Act will provide as I work to grow my business,”said Gary Hess, Founder and Executive Director of the Veterans Alliance for Holistic Alternatives (VAHA). “Having access to loans and grants will allow American cannabis entrepreneurs and businesses to reinvest in their employees and communities. The CLIMB Act will unlock these long-awaited, critical funding streams and promises to build a more fair and equitable industry.”

 

"Small cannabis businesses cannot effectively compete in the highly regulated and complex cannabis industry without access to capital and lending services,” stated National Cannabis Industry Association CEO Aaron Smith. “This bill is a much-needed reform that will help level the playing field for main street cannabis businesses across the country.”

 

As of January 2022, over 425,000 full-time jobs are supported by the regulated U.S. cannabis industry. Further, the state legal cannabis industry produced nearly $25 billion in sales in 2021, outpacing many other industries in terms of size and growth, and the domestic industry is expected to grow to $41.5 billion by 2025—representing the fastest growing sector in the U.S. over the last decade.

 

The full text of the bill can be found here.

 ###