Deemed Essential, The Medicinal Cannabis Industry Is Leading During Coronavirus Outbreak
By Michael Bronfein, CEO, Curio Wellness.
As more cities and states moved to shelter-in-place restrictions as a result of the novel coronavirus outbreak, mayors and governors have insisted that businesses who sell medicinal cannabis are essential and should remain open. This decision underscores the growing understanding of the health and wellness benefits of cannabis at a moment when the coronavirus outbreak has led to a sharp increase in the number of Americans reporting negative impacts to their mental health and emotional and physical well-being.
Over the last several weeks, as people have come to terms with the reality of shelter-in-place restrictions and social distancing, the demand for medicinal cannabis products has spiked. The reason is clear: those who rely on cannabis for health and wellness conditions are concerned they’ll lose access to the medicine they need. This is no different than their desire to maintain access to their prescription drugs.
The coronavirus pandemic presents an inflection point for the industry to recalibrate and focus on what it has always aspired to be: a provider of effective treatment alternatives to some of today’s most pressing medical challenges.
Already the industry is displaying leadership in handling the crisis at hand. Dispensaries quickly adapted to new guidance from the Centers for Disease Control and Prevention (CDC) and other sources, increasing cleaning operations, moving entirely to curbside or delivery options, and even providing exclusive hours for the elderly and immunocompromised. Most importantly, the medicinal cannabis industry is providing cost-effective, affordable treatments to millions of Americans who are concerned about their financial well-being, perhaps now more than ever.
Despite this, the cannabis industry remains locked out of key sources of funding, including those specifically focused on helping small businesses weather the coronavirus outbreak. Unbeknownst to many of the patients who rely on them, cannabis companies – most of which are small businesses – aren’t entitled to the same benefits other small businesses enjoy.
The chief culprit is a requirement known as section 280E; a tax penalty that prevents state-licensed, legal cannabis companies from accessing many of the operating deductions afforded to all other businesses, which can result in taxable income rates of 90 percent or more. This seemingly small detail can make it all but impossible for small business owners and dispensaries of medicinal cannabis to attract capital to invest in living wages and innovation. Why? Because of structural problems within the U.S. tax code originating with the failed war on drugs of the 1970s.
Tax code inequities like this one undercut businesses throughout the industry under normal conditions but now are creating even more pain because of the pandemic – with cash flows and consumer spending disrupted. When the dust settles, how will young companies in this nascent industry fund themselves? Image what our country would look like if Apple or Google were burdened with this financial anchor when they were in a burgeoning industry?
More than anyone, the patients who rely on cannabis are hurt by this policy choice. By undercutting the companies who are developing innovative, cost-effective treatments, the current system risks denying patients access to care at a time when they need it most and eliminates the industry’s ability to invest in product research and development, creating a vacuum of innovative medicinal products.
The coronavirus pandemic and the access issues it threatens have made clear how integral medicinal cannabis is to the millions of people across the country who rely on it for their health and well-being every day. Patients have been waiting for cost-effective alternatives to treat the conditions and symptoms they experience, from PTSD and depression to cancer and arthritis – and they deserve an industry that can be flexible, thoughtful, responsive, and innovative particularly in a time of economic and health uncertainty.
After decades of hard-fought efforts to gain recognition, the medicinal cannabis industry has proven its value in multiple ways, even earning FDA approval of a cannabis-derived pharmaceutical.
Giving the medicinal cannabis industry the resources and access to cost effective capital all other businesses enjoy would enable it to accelerate R&D and deliver safe, effective, and reliable new products to market faster, unlocking even greater benefits for patients across the country. The industry has acted in a responsible and accountable manner in this crisis. Now it’s time for Congress to act.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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