Cannabis During COVID-19: Is It An “Essential” service?

When COVID-19 began to spread and businesses started shutting down, the question arose if dispensaries were going to be considered an “essential service”.

For the well being of myself and those within strangling distance of me, yes, it’s a super essential service, and it behoves us all to keep that supply line open.

Yet that is simply my definition of essential. How does the government determine if something qualifies for that coveted label?

Fun fact, provided you have a broad definition of “fun”: Under the Essential Services Act of 2013, the President is given free rein to determine which businesses are considered essential, aside from the universally agreed upon services such as utilities, hospitals, national defense, etc.

That free rein in determining what is essential is best left to Presidents who don’t speak as though they are very drunk with a serious head injury, but here we are.

Oregon’s definition of essential is fairly broad. There isn’t a set in stone list of all businesses considered essential, but they include Grocery stores, Medical and Health Care services, Pharmacies, and Coffee shops/Restaurants provided they can adhere to social distancing and other safeguards.

And then we have dispensaries. Social distancing made having customers inside the dispensaries untenable, resulting in most dispensaries migrating to curb side pick ups and deliveries.

This served the goals of the State’s “Stay Home, Save Safe” campaign well, and provided some much needed stress relieving products for a state and nation on edge like never before. It also continues to employ Oregonians, and raise desperately needed tax revenue.

Liquor Stores made the cut too, and the same could be said about liquor sales – that it’s an adult product sold under strict state supervision which relieves stress, and the sale of which creates jobs and revenue.

Except someone with a serious alcohol dependency can become very sick, or dead, when alcohol is suddenly no longer available. You may get grumpy if you go cold turkey on cannabis, but you aren’t going to die. (Those around you may feel differently.) In such cases, access becomes a public health matter.

Those using cannabis to treat a medical condition would argue their continued unfettered access is essential as well. Those using cannabis to address opioid addiction, PTSD, or myriad of mental health challenges would also feel the same.

Maintaining the farm to dispensary chain becomes a pubic health matter when you consider the alternative: An unregulated, underground marketplace, filled with untested products and zero age requirements.

I know we have a short collective memory, but it was just last year when thousands were hospitalized, and some died, due to the baffling respiratory illness EVALI. Anyone remember?

Pepperidge Farms does, and the culprit in the EVALI crisis seems to be illegal produced cartridges cut with additives such as Vitamin E acetate. (And don’t forget butane blasting half wits, blown up real good while making BHO in their garages.)

The Cannabis industry hasn’t been spared during the pandemic, and many hoped the Feds would allow them to apply to grants and loans from the CARES Act Stimulus Bill signed on March 27.

Per the New York Times:

“For companies struggling under the strain of the crisis, the measure will provide $377 billion in federally guaranteed loans to small businesses and establish a $500 billion government lending program for distressed companies.”

But despite being a job creating, public health goal supporting, absurdly high tax paying industry considered by many states to be essential, the Feds were very specific about excluding the cannabis industry from these programs.

The Small Business Administration, administer of the money, announced the exclusions in their regulations.

As MJBiz Daily report:

“But those regulations specifically barred “direct” and “indirect” marijuana businesses from obtaining loans and defined an indirect business as one that “derived any of its gross revenue for the previous year” from sales to direct marijuana companies.”

The article goes on to talk with tax experts who mention the CARES Act may have some tax benefits, under certain conditions, and even then, maybe not. That’s small comfort to an industry operating under 280e, with it’s overwhelming effective tax rates of up to 70% and more.

California stepped up in offering a package of extensions, deferrals, loans, and debt forgiveness to the industry. A nice step, but still not enough for a state with some of the the highest cannabis taxes in the country.

Up next: Cannabis as a COVID-19 coping tool, and possible…cure?

Josh Taylor is a well-known and successful entrepreneur in the legal cannabis space, producing B2B and B2C cannabis events, "Backstage Budtending" and upscale concierge services through his companies and His weekly syndicated newspaper column and features about cannabis ran for five years until March 2020.

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