The economic consequences of the coronavirus pandemic are being felt all across Canada, and the cannabis industry is no exception. Seeking to overcome this economic fallout, the cannabis sector is looking for financial aid. Sadly, the Business Development Bank of Canada (BDC) has decided to look the other way, leaving all Canada’s cannabis businesses in a difficult position.
The Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) have outlined, in the last week, a plan of exceptional financial measures to respond to the economic crisis generated by the new coronavirus.
In an effort to help Canada’s economy, as the COVID-19 pandemic continues to force businesses to close, the Canadian government will allocate loans worth $10 billion. The financial aid plan includes a great variety of sectors but, at the same time, excludes the entire cannabis industry.
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Canada’s economic measures exclude the cannabis industry
Dan Sutton, CEO and founder of the British Columbia-based Tantalus Labs, wrote on Twitter that the Business Development Bank of Canada (BDC) has told him that, for the time being, they are not allowed to do business with cannabis companies in the country.
According to Dan Sutton, there is a lack of willingness on the part of the Business Development Bank of Canada (BDC) to serve the cannabis sector, which could have a dramatic impact on small businesses all around the country.
“By protecting the health and safety of our employees, cannabis companies can face operational downtime related to quarantine, but that will lead to crop losses,” he said.
Suton continued: “Small businesses depend on the sale of cannabis as it is harvested. An interruption of this cash flow puts the continuity of all the operations at risk. Millions of dollars are now blocked in organic assets currently in cultivation. So, companies like Tantalus Labs hope the government of Canada appreciates the contribution of the cannabis sector to the country’s economy, and can help us so that we don’t have to choose between the safety of employees or the protection of their jobs.”
Business Development Bank of Canada disappointed the Canadian cannabis industry
Auxly CEO, Hugo Alves has also shown his disappointment with the Business Development Bank of Canada (BDC) position by questioning why a federal agency would refuse to work with a sector specifically created by the federal government.
A spokesman for Export Development Canada (EDC) stated that he is looking at the problem in more detail, as the types of companies eligible to access the program are still unknown. Whatever the case, Canada’s cannabis industry is certainly feeling the strain of COVID-19 and trying to overcome the economic fallout. Canopy Growth, for example, has announced that it will temporarily close all 23 of Tokyo Smoke & Tweed’s corporate retail sites in response to the coronavirus outbreak.
Taking a step in the right direction, the Farm Credit Canada (FCC) has decided to lend a hand to the cannabis industry. The government agricultural lender said all of its loan products are available to legal cannabis growers nationwide, guaranteeing cannabis companies access to the capital needed to overcome any cash flow for short-term challenges, such as the coronavirus economic fallout.
Although loan products are not linked to the COVID-19 pandemic, any liquidity offered by the Farm Credit Canada (FCC) may be useful for Canadian cannabis companies experiencing the widespread economic and financial consequences of the pandemic.
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First published in Canna Reporter, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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