The COVID-19 pandemic has caused the industrial hemp industry to experience its fair share of hardships and financial instability. There has been interference with supply chains, working capital is at an all-time low, and demand for hemp-related products has assuredly decreased due to reduced consumer buying power.
There is a silver lining in all of this hardship, though, and that is the fact that the Paycheck Protection Program and Health Care Enhancement Act was signed into law on Friday, April 24, 2020, which is a $484 billion stimulus package. This Act includes $321 billion to fund the recently depleted Paycheck Protection Program (PPP) loans. Businesses and farmers in the hemp industry should strongly consider seeking access to these loans, which can be eligible for 100% forgiveness.
The additional economic stimulus also brought with it $60 billion in additional funding to replenish the Emergency Injury Disaster Loan (EIDL) program. Furthermore, due to the collective advocacy efforts of the hemp industry coalition, farmers (including hemp farmers) are now eligible to apply for the EIDL, which can provide up to $10,000 in advance money for small businesses in need. This is a huge victory for the hemp industry and will undoubtedly provide some much needed liquidity for struggling hemp farmers and hemp-related businesses.
In addition to the funding noted above, the U.S. Department of Agriculture has announced an additional $19 billion of funding will go to farmers affected by the pandemic. Much of this funding ($9.5 billion) will go to dairy, livestock, and produce farmers, while the rest will be divided among row crop farmers and “other crops”. Because hemp was recognized as federally legal in the 2018 Farm Bill, it should be treated equally to other crops for purposes of this funding, which is a great milestone for hemp farmers.
The COVID-19 pandemic has brought with it plenty of uncertainty to all types of business environments, including the hemp industry. Our COVID-19 Resource Center can be a valuable tool for you to keep up with any hemp industry updates and can provide some clarity to this ever-changing economic environment. Please consider reaching out to one of our industry experts to help devise a plan for your business for the uncertain months to come.