Statement of the Hon. Nydia M. Velázquez on Unlocking Potential? Small Businesses in the Cannabis Industry
Washington, June 19, 2019
Today we are here to draw what I believe is needed attention to an industry that is rapidly evolving. As more and more states take steps to bring cannabis to commerce, we are seeing small businesses at the forefront of this expanding industry. As the only House Committee dedicated solely to the needs of small firms, it is important for us to be shedding light on the challenges these small entities face as well as the economic potential they offer. That is why I have called today’s panel and I look forward to hearing more from our witnesses and thank them for taking the time to be with us this morning.
In recent years, there has been a rapid shift in the legal treatment of cannabis, often led by voters at the local and state levels. Today, nearly every American lives in a state where cannabis is decriminalized to some extent, and legal business activity is permitted to certain degrees. This rapid growth of the legal cannabis industry has had a considerable impact on our nation’s broader economy. In 2018, consumer spending in this industry passed $10 billion for the first time, and consumer spending is expected to increase to $23 billion by 2022.
Investment activity also increased dramatically last year up $13.8 billion in 2018, compared to only $3.6 billion in 2017. Clearly these figures illustrate a market that is ripe for entrepreneurs and starting a business.Despite growing economic opportunities around legal cannabis, factors like federal law enforcement, conflicting rules among the states, and our current banking regulations are hindering the ability for entrepreneurs and small businesses to fully engage in this new industry.
So today we will have a chance on this Committee, to spark the dialogue over the role the federal government, and particularly, the Small Business Administration, can play here in supporting entrepreneurs in this sector. By reducing financial barriers to entry in cannabis related businesses, SBA can play a critical role in offering affordable access to capital and counseling services. That is why I am currently working on legislation that will work to open some of the agency’s programs to businesses in areas where the industry is legal.