Companies Making CBD Gummies, Vapes, and Lube Got Millions In Bailout Loans
May 2, 2020WASHINGTON — The Trump administration has doled out millions in forgivable emergency loans to companies selling CBD gummies, oils and vape cartridges, despite blocking state-legal marijuana dispensaries from accessing those same rescue funds.
At least three specialty CBD vendors scored a total of over $4 million in federal loans in April, according to Securities and Exchange Commission filings reviewed by VICE News. Marijuana companies, whose product remains illegal at the federal level, have been shut out.
The mixed result reveals yet another quirk of the federal government’s scramble to save American businesses from collapse with a $670 billion Paycheck Protection Program that’s proven both popular and controversial, as public outrage shamed big national chains into returning money that was intended to help small firms. The program was created in March by the $2 trillion CARES Act, which aims to save the US economy from entering a depression.
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These public disclosures suggest that loans to companies selling CBD, a non-psychotropic chemical derived from cannabis, could be a lot more widespread than has been publicly reported. Only publicly-traded companies are required to disclose their loans — and smaller, private CBD vendors may have gotten loans but simply not announced it.
The lucky borrowers include:
- CBDMd: $1.5 million. A company headquartered in Charlotte, NC, that sells CBD-infused tinctures, capsules, gummies, bath bombs, topical creams, animal treats and oils.
- CV Sciences: $2.9 million. A firm based in San Diego, CA, that operates the PlusCBD line of gummies, oils, drops, balms and lotions.
- Lifted Made: $150,000. A company that sells a wide variety of CBD products from vape cartridges to smokeable pre-rolls, oils, and a line of CBD-infused lube.
The difference between how state-legal marijuana and CBD-focused companies are being treated by Trump’s Small Business Association appears to stem from a decision announced by the Small Business Administration back in 2019.
The agency announced that companies selling hemp products, which contain very tiny amounts of THC, would generally be allowed to access the agency’s funding programs, while companies selling marijuana would not. Many CBD products, which have grown enormously popular, are derived purely from hemp and contain only trace amounts of THC, which is the mind-altering chemical that makes marijuana so exciting.
Now, that discrepancy between how marijuana and CBD companies are treated appears to have also filtered through to the SBA’s PPP loan initiative, a program that has saved thousands of small businesses from collapse while sparking fierce criticism over the question of who got a loan, and who didn’t.
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The SBA has been lambasted for allowing large national restaurant and hotel chains, including Ruth’s Chris Steakhouse and Shake Shack, to receive multi-million dollar loans. Both have said they’ll return the money after being whiplashed by the public.
For now, marijuana businesses have been stranded in the awkward position of being banned from the federal government’s small business loan program, despite being considered “essential” businesses in many states.
Cover: An employee wearing a protective face mask and gloves arranges products on a shelf at the Harborside dispensary in Oakland, California, U.S., on Monday, March 23, 2020. (Photo: David Paul Morris/Bloomberg via Getty Images)
