The Small Business Administration (SBA) issued updated guidance regarding hemp and marijuana related businesses in August of 2019.
Guidance on Grantees Providing Assistance to Marijuana-Related Businesses
The SBA guidance states that hemp businesses are eligible to receive SBA-funded technical assistance. The full section on hemp states:
With regard to the issue of businesses that produce or sell hemp and hemp-derived products,
the recently enacted Agriculture Improvement Act of 2018 (Public Law 115-334) changed
the Federal government’s legal treatment of hemp and hemp products. As a result of this
legal change, a business that grows, produces, processes, distributes or sells products made
from hemp (as defined in section 297A of the Agricultural Marketing Act of 1946) would
not be considered a Direct Marijuana Business and would therefore be eligible to receive
SBA-funded technical assistance if it is a legal business under state law and is not aiding in
the use, growth, distribution, enhancement or other development of marijuana.
Finally, as to the issue of Cannabidiol (CBD) and products containing CBD, in practice
CBD may be derived from either marijuana or hemp. When CBD is derived from marijuana,
it is a Schedule 1 controlled substance under the Controlled Substances Act (21 U.S.C. § 801
et seq.).
This means that firms, that develop or market CBD and CBD products derived from
marijuana, would be considered Direct Marijuana Businesses as defined above and would
thus not be eligible to participate in SBA technical assistance programs. However, when
CBD is derived from hemp (as defined in section 297A of the Agricultural Marketing Act of
1946), it is not a controlled substance, and firms that develop or market CBD and CBD
products derived from hemp would not be considered Direct Marijuana Businesses. The firm
would be eligible to participate in SBA technical assistance programs, if the business and its
products are legal under state law and comply with all applicable federal, state, and local
laws and regulations.
The SBA guidance clearly concludes that hemp derived CBD is not a controlled substance. SBA has determined that hemp businesses are eligible as long as the business and its products are legal under state and federal law and comply with all relevant regulations.