Can a marijuana or cannabis business get an SBA loan?
Short answer
No. A business that grows, produces, processes, distributes or sells marijuana products is ineligible, even where state law allows it. Some smoke and paraphernalia sellers are also barred. Source: 13 CFR § 120.110(h); SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.
No. Federal law prohibits the distribution and sale of marijuana, so 13 CFR § 120.110(h) applies. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E spells out the result.
Who is ineligible
A business that grows, produces, processes, distributes or sells marijuana, marijuana products, edibles or derivatives is ineligible, regardless of the amount. The rule covers recreational and medical use. It applies even if the business is legal under state or local law.
Smoke shops and paraphernalia
A business is also ineligible if it sells smoking devices, pipes, bongs, inhalants or other products primarily intended or designed for marijuana use. The same applies if it markets products for that use. If a shop sells hemp or CBD products or devices associated with consuming marijuana, the lender must obtain proof the products are not illegal.
Vendors
An applicant that makes, sells, services, distributes or promotes products or services used in connection with illegal activity is ineligible. The exception is where that use is shown to be completely outside its intended market.
Landlords with cannabis tenants
During the life of the loan, pledged real estate cannot be leased to a business you know is engaged in illegal activity. A marijuana dispensary is the SOP's example (Sec. A, Ch. 3, Para. C).
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