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Cannabis Workers, Unemployment Insurance, and the Small Business Administration: What You Need to Know

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Washington, DC: There is no doubt that the COVID-19 pandemic is adversely impacting businesses around the world, and smaller businesses especially. That is why this week, NORML reached out to our numerous allies on Capitol Hill to ensure that any Unemployment Insurance aid packages considered by Congress provide relief to cannabis-industry personnel who have been or will be either furloughed from their jobs.

“Given the tremendous amount of uncertainty in the broader economy, the hundreds of thousands of American workers who are employed by the state-legal marijuana industry must be respected and protected by the emergency actions being taken by elected officials,” said NORML Political Director Justin Strekal.

Why this clarification is important

According to a recent report by, the state-licensed cannabis industry employs more than 240,000 American workers. To put that total in context, the state-authorized cannabis marketplace employs over four times the number of American workers as does the coal industry.

Yet, despite the economic and political progress that has been made in states around the country, marijuana is still defined by federal law as a Schedule I substance with no medicinal value and a high potential for abuse. In short, federal anti-drug laws continue to define the state-authorized cannabis industry, and those who work in it, as drug felons. That is why these businesses continue to face undue discrimination under federal law, including the lack of access to banking services and a prohibition of standard business tax deductions.

NORML is seeking to ensure that similar discriminatory practices do not apply to those in the industry seeking unemployment benefits during these uncertain times.

For now, this is what we know:

State-level unemployment insurance will continue to provide benefits to laid-off cannabis workers

Workers who were employed by a licensed cannabis business that properly paid their unemployment insurance taxes should be protected and eligible to receive benefits.

Federal dollars are going to support state programs — not to dictate how they must use the money

Legislation recently passed by Congress, the Families First Coronavirus Response Act, includes nearly a billion dollars in funding to aid state-administered unemployment insurance programs.

After speaking with several experts, it is NORML’s understanding that the transfer of these funds from the federal government to the state governments provides the individual states with the authority to decide for themselves which industries are legally eligible to receive benefits.

That said, should any recently laid-off workers from the legal industry believe that they are being subject to undue discrimination, we encourage them to contact NORML at

Cannabis businesses not eligible for Small Business Administration disaster relief aid

By contrast, state-licensed cannabis businesses will not be eligible for either financial assistance or low-interest loans under newly enacted federal legislation instructing the Small Business Administration to “provide capital and liquidity to firms affected by the coronavirus.”

However, the Small Business Administration is currently prohibited from allowing state-legal cannabis companies access to any of its services. This policy was just reiterated by the agency:

“Because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to businesses that are illegal under federal law,” Carol Chastang, SBA public affairs specialist, told the publication Cannabis Business Times. “Businesses that aren’t eligible include marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law.”

In response, NORML will continue to work with our federal allies to call for an end for such discriminatory practices against the cannabis industry and those whose livelihoods depend upon it.

Specifically, legislation has already been introduced by Small Business Committee Chairwoman Nydia Velazquez to end this discrimination: the Ensuring Safe Capital Access for All Small Businesses Act of 2019, HR 3540. This language has also been included in The Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, HR 3884, which passed the House Judiciary Committee last November on a bipartisan basis and awaits action by the full House of Representatives.

“Now is not the time for Congress to think small,” said NORML Political Director Justin Strekal. “Including Chairwoman Velazquez’s proposal to have the SBA support small cannabis businesses would protect both American jobs and the consumers that they serve.”

If you have not read our statement on the COVID-19 pandemic that we released earlier this week, please take a moment to do so by clicking here.


NORML’s mission is to move public opinion sufficiently to legalize the responsible use of marijuana by adults, and to serve as an advocate for consumers to assure they have access to high-quality marijuana that is safe, convenient, and affordable.

Find out more at and read our factsheets on the most common misconceptions and myths regarding reform efforts around the country at

Justin Strekal
NORML Political Director

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