october 28, 2020
october 22, 2020
October 19, 2020
october 15, 2020
october 12, 2020
october 8, 2020
october 5, 2020
september 22, 2020
september 21, 2020
September 11, 2020
august 4, 2020
july 6, 2020
july 1, 2020
- PPP Loan Deadline May Be Extended as SBA Issues New Rules Relating to Loan Forgiveness and Eligibility
- California Looks to Pass Legislation Concerning Business Interruption Coverage Due to COVID-19
June 29, 2020
June 22, 2020
- PPP Loan Forgiveness Application Forms Updated and Streamlined
- Nevada Division of Insurance to Disallow Policy Exclusions Related to COVID-19
- CDI Announces New Order Regarding Workers’ Compensation Premium Savings for CA Businesses Affected by COVID-19
june 15, 2020
june 10, 2020
- Note to the SBA: Debtors in Bankruptcy Are Eligible for PPP Loans
- California Modifies the Tolling of Statutes of Limitations in Civil Cases
june 8, 2020
June 4, 2020
may 29, 2020
may 28, 2020
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
MARCH 16, 2020
MARCH 5, 2020
Coronavirus Buzzkill: CARES Act Overlooks Cannabis
APRIL 17, 2020
The CARES Act was enacted with much fanfare as a $2T boost to the U.S. economy devastated by the COVID-19 pandemic. In fact, the federal stimulus package—which includes individual recovery rebates, targeted lending to businesses, and tax credits aimed at the preservation of employment—has been a welcome lifeline for many, though there is at least one industry that the CARES Act leaves out in the cold: legal cannabis.
PPP Loans Are Not an Option
Those working in the legal cannabis space adversely impacted by the coronavirus outbreak must look to state governments for any necessary relief (either financial or regulatory), all due to the fact that the sale and distribution of cannabis still violates federal law. Consider this: many of the lending programs authorized under the CARES Act are administered by the Small Business Administration, yet pursuant to recently released SBA guidance, the agency “does not provide financial assistance to . . . marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law.”
The SBA’s stance is result of the continued Schedule I status of cannabis under the Controlled Substances Act (CSA). As such cannabis businesses are ineligible to participate in the Paycheck Protection Program, which is intended to keep small businesses afloat during the current COVID-19 crisis. Not only are PPP loans unavailable to legal cannabis operators during the current economic downturn, but ordinary bank loans are as well given federal banking laws that limit the ability of federally insured financial institutions to lend to such businesses.
Indirect beneficiaries of the cannabis business (e.g., companies that sell equipment or provide infrastructure to the industry) are also barred from obtaining CARES Act relief. The SBA has classified such entities as “indirect marijuana businesses,” many of which are feeling the economic consequences of the pandemic, without any federal programs to rely upon.
Forget About Tax Breaks Too
The CARES Act provides a payroll tax credit, but even this benefit of the legislation is likely inaccessible to employers in the legal cannabis sector. Pursuant to federal tax law, no deduction or credit is allowed for any amount paid or incurred in association with the trafficking in controlled substances within the meaning of Schedule I and II of the CSA. Consequently, there would be a significant risk to legal cannabis businesses that elect take the payroll tax credit under the CARES Act (absent future favorable guidance by the Internal Revenue Service). In the event such a business claimed a payroll tax credit that was successfully challenged, the IRS could impose interest and penalty charges.
Fortunately and notwithstanding all of the foregoing, the news is not all bad.
States to the Rescue
Seven states—California, Colorado, Illinois, Maine, Massachusetts, Nevada, and Washington, in which the sale of medical and recreational cannabis is legal—have designated legal cannabis as an essential business. As such, in these jurisdictions, where other businesses have been shuttered pursuant to stay-at-home and similar orders, legal cannabis operations are authorized (perhaps with a wink and a nod to federal prohibitions) to continue generating revenue, be it at full or limited capacity. Likewise, most states that have legalized medical marijuana are permitting medical cannabis dispensaries to remain open these days as well, though Vermont, Michigan, Oregon, and Alaska—where cannabis has been legalized for all purposes— have not deemed dispensaries as essential.
Even in states where the legal cannabis business is considered essential, there are, of course, some temporary limitations on operations in light of social distancing concerns. By way of example, Colorado requires cannabis dispensaries to restrict the number of people inside their stores, and encourages pre-orders and curbside pickup. Illinois is allowing curbside pickup too, and for its part, Nevada has closed storefronts but has authorized deliveries.
Federal Help May Be on the Horizon
Cannabis lobbying groups have urged governors to provide loans at the state level and to push their states’ congressional delegations to include legal cannabis businesses in the next federal relief package. Toward that end, there are rumors that Speaker Nancy Pelosi (D-Calif.) and Congressman Ed Perlmutter (D-Colo.) are devising a workaround for allowing cannabis companies to receive SBA loans. According to a representative of the lobbying firm Brownstein Hyatt Farber Schreck, “There is a very robust conversation happening in the House right now about how to help these companies going forward.”
So perhaps on the federal assistance front, there may be some light at the end of the tunnel for legal cannabis businesses. In the meantime, these companies can lean on the activity at the state level for some much-needed support.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.