Last week, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) hatched a plan to increase loans issued on commercial terms by $10 billion in an effort to aid the economy as COVID-19 continues to spread and forces businesses to close, according to a Yahoo Finance Canada report.
It appears this assistance does not extend to Canada’s cannabis industry, however.
Dan Sutton, CEO and founder of British Columbia-based Tantalus Labs, tweeted that the BDC told him that it is “not authorized to do business with cannabis companies.”
So BDC just let us know regarding COVID relief for businesses that need to compensate employees in quarantine and may face operational shutdown, "we are not authorized to do business with cannabis companies."— Dan Sutton (@DSutton1986) March 16, 2020
Is our workforce different than any other Canadian business?
“Is our workforce different than any other Canadian business?” he asked.
From Sutton’s perspective, the BDC’s unwillingness to serve the industry could have a dramatic impact on small businesses.
“In protecting our employees’ health and safety, cannabis companies may face quarantine-related operational shutdowns, leading to crop loss,” he told Cannabis Business Times. “Small companies rely on selling cannabis as it is harvested, and an interruption of this cashflow reasonably puts us at risk of continuing to operate. With millions of dollars locked in biological assets currently in cultivation, companies like Tantalus Labs need the ability to ramp down and ramp back up over quarters, not months. We hope that the Government of Canada appreciates the cannabis economy’s contribution to our GDP and can come to our aid so that we do not have to choose between employee safety or protecting their jobs.”
An EDC spokesperson told Yahoo Finance Canada that she is looking into the issue further, as she is unclear on which types of businesses can access the program.
Whatever the case, Canada’s cannabis sector is certainly feeling the strain of COVID-19. Canopy Growth, for example, announced that it will temporarily close all 23 of its corporate-owned Tokyo Smoke and Tweed retail locations, effective at 5 p.m. on March 17, in response to the coronavirus outbreak.