MJBizMag September 2022 - 48

STRENGTH AT ANY SIZE
" It's a mess, " he told MJBizMagazine.
" As long as cannabis is illegal, it's
going to be a pain to access any federal
resources. "
HEMP'S LESSON:
SLOW AND STEADY
Even when U.S. laws change on
marijuana prohibition, business
startups won't see government loans
and assistance appear overnight-just
ask folks who work with hemp.
Four years after legalization, hemp
cultivation remains a new and volatile
industry that struggles to attract public
assistance.
Take crop insurance, for example:
Hemp growers gained access to
federally subsidized insurance four
years ago, when Congress legalized
cultivation nationwide.
But crop insurance policies rely
on years of cultivation data, and
insurers remain slow to offer coverage
on a crop that doesn't have reams of
background data.
" There has been slow and steady
improvement in the way that federal
agencies treat hemp, " said Jonathan
Miller, lawyer for the U.S. Hemp
Roundtable. " That said, it doesn't
happen right away. "
DIFFERENT STORY IN CANADA
Prohibition repeal in Canada means
that small cannabis businesses there
are much better positioned to access
government help.
The nation's economic-development
agency-Innovation, Science and
Economic Development Canada-
includes agencies that deliver financial
assistance and advice to small operators.
In June, another federal
agency-Prairies Economic Development
Canada (PrairiesCan)-announced it
had given a Saskatchewan cannabis
nursery $1.4 million (CA$1.8 million) in
an interest-free loan for expansion.
The company, Mother Labs, has three
years to spend the money and five years
to repay it.
48 September 2022 | MJBizMagazine
Saskatchewan cannabis nursery Mother
Labs received a $1.4 million government
loan for expansion. Courtesy Photo
" It's smart money, and it will be truly
helpful for us to grow and expand, "
Mother Labs CEO Brian Bain said.
STATES AND NONPROFITS
STEP IN
There is hope for new U.S marijuana
entrepreneurs who need help, though.
Several states have created assistance
programs to address the lack of federal
funding and guidance for companies
that work with high-THC cannabis.
Some state regulatory agencies have
said that the lack of government
business support is a major culprit
behind the scarcity of cannabis
business owners who aren't white and
wealthy.
" There's a lack of diversity at the
ownership level in cannabis, " Watkins
said. " To change that, we need to
provide assistance for all. "
California, Illinois and New York are
among a smattering of states that offer
at least some help for new marijuana
startups.
In May, a venture capital investment
vehicle owned by the state of
Connecticut disclosed it had invested
$1.25 million in the marijuana edibles
company 1906.
Connecticut Innovations and 1906,
which relocated to Connecticut from
Colorado, said it was the first time
a state had invested directly in a
cannabis business rather than through
a pension fund.
" We view this as an emerging
area for investment-and one we're
happy to explore, " Lauren Carmody,
vice president of marketing and
communications for Connecticut
Innovations, wrote in an email to
MJBizMagazine.
" As with any of our investments,
there is calculated risk. But we are
accustomed to assessing risk and
investing in companies that can
deliver returns and create jobs in
Connecticut. "
Colorado's Cannabis Business Office
in July announced it had chosen
16 social equity marijuana companies
to receive Cannabis Business Pilot
Grants of up to $50,000 from the state.
Announcing the grants, Gov. Jared
Polis said, " Our nation-leading work
promoting equity and supporting
innovation in Colorado's thriving cannabis
industry supports our economy,
saves small businesses money and
ensures our state remains the best
business-friendly destination in the
country. "
Meanwhile, nonprofit groups such
as Make Green Go, NuProject and the
Forty Acre Co-op offer business advice
and occasional loans to new cannabis
businesses, too.
" To start a new business in any field
can be a capital-intensive process,
and in cannabis, it is very capitalintensive, "
Watkins said. " It's hard to
bootstrap a cannabis business without
any help, compared to opening a food
truck or something.
" That's why it's important to get the
word out about the assistance that is
available and make sure people know
how to find help. "
MJBizMagazine reporter Solomon Israel
contributed to this story.

MJBizMag September 2022

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