website development

SBA rules crackdown on everyone from architects to website development companies that derive revenue from supporting cannabis businesses.

The Trump administration’s efforts to slow down legal marijuana businesses has moved to take on website development businesses and others who provide services to cannabis companies.

The U.S. Small Business Administration has tightened rules prohibiting banks from making SBA-backed loans to businesses with any connection to cannabis. Such loans had already been restricted from companies that dealt directly in weed. But now, the SBA wants to apply them to any companies that help such businesses, from website development to building grow facilities.

According to CNBC:

SBA now also precludes lending to any firm that is even indirectly doing business with a marijuana-related operation, significantly expanding the number of businesses no longer eligible for SBA-backed loans.

The rule defines such a business as one that “derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana.”

For most law-abiding citizens, that may seem like a very reasonable extension of the rule that prohibits offering SBA loans to a business involved in illegal trade, but it is significantly more difficult to follow in practice.

In a state like Colorado, where marijuana is a substantial part of the economy, many otherwise legal businesses may now be ineligible for SBA loans, because they derive some small part of their revenues from direct marijuana businesses.

The rule applies to bong manufacturers, of course. But it also could hit website development firms, architects and others who derive some small portion of their revenue from the cannabis business. It comes at a time of increasing acceptance for legalized marijuana. Private equity firms and individual investors have backed a number of businesses working in support of legal cannabis businesses.

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