If there is anything to be said about the current environment we are in, it is that it really pays to be prepared. With everything being already unpredictable as they are, business owners should create back-up plans to save themselves from any damages later on. Fitting in this context, Tony Frischknecht talks about how you can be financially prepared if there is a second lockdown. Join him in this brief episode to get right to it.
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How To Be Financially Prepared For A Possible Second Lockdown
Thanks again for joining me. It’s always exciting here in the cannabis world. We have so much going on in our lives. I’m hoping I can keep some of you up to speed where your lives are spinning around, you’re trying to make some investment happen, and also make your business thrive. It takes an amazing amount of focus to be successful in the cannabis industry for many reasons. One of the things that I want to share with you is some interesting news that I came across. This was a court case to the PPP loans that were given out back in March 2020. As small business owners, it’s a challenge every day but one of the things that become extremely frustrating, especially for us cannabis folks is, we pay all these taxes into the federal government into our state.
When it comes time to need help in work companies too and there are many companies out there that are struggling. I feel for some of you that are out there trying to make it happen. We’ve seen some huge growth in many areas where cannabis has been deemed essential which is fantastic. Back East, there are a few states that aren’t lucky like Massachusetts, New Jersey, and some other ones. I know you are making it happen but if there had been some available help like this PPP loan that many other businesses were able to take advantage of and many other people were, some of you may be in a better place or may still be in business. It is an unfortunate part of being an entrepreneur is failing is one of those things that happens to all of us. With that said, I want to talk about this case. It’s a Diamond Club versus the Small Business administration.
These companies took the next step in trying to fight for the PPP loan. A group of around 30 different businesses got together. They sued for a temporary injunction at the end of April 2020 which was the time when everybody was panicking. They refused any type of PPP loans and there were only two things that you had to be able to apply for a PPP loan which is one, you had to be a legal business and secondly, you had to be a business with less than 500 employees. There are hundreds or thousands of those out there. In fact, these companies went and talked to their local lenders and their local lenders refuse to even process their application.
Their SBA said that they were in full compliance to their rules and regulations and the SBA doesn’t make any loans to prudent sexual nature businesses. When I read through this case, they had stated this that they weren’t lending to clubs such as gentleman’s clubs, live entertainment dancers which has been in their rules of lending for a long time. They also came out with an SOP which was enacted in 2019 stating the same things in their regulations that they will not lend. However, COVID is extremely out of the ordinary.
Congress provided temporary paycheck support to all Americans employed by all small businesses. There was no disfavoring happening because their point was we need to make sure everybody is helped. The small business administration decided to take it upon themselves, revert back to their old rules, and stopping them from getting any of these loans. Here’s the great part about this. They sued, the courts agreed, and they got the injunction. It was granted May 11th, 2020 at 5:00 Eastern PM. It happened, however, I do not know how many of these companies were able to receive the money from the loans. As everybody knows or if some of you don’t, there was only much money given out. They had given out close to $700 million to the SBA to lend out.
They are discriminating against other companies as cannabis since the beginning. The reason why I bring this case up is not because I know if they got the income but the potential for a lockdown again could happen. These guys got together in their groups. It was a total of 33 and all of them had issues but they all got on one lawsuit and we’re able to push this through quickly as I said, however, the timing of the essence of the money that’s going to be available, I don’t know if they were successful in gaining it. With the idea that there could be a potential second lockdown, somebody in cannabis businesses may want to start talking in some of your association groups. Anywhere where you have a group of business owners, dispensary owners, extraction companies, delivery services, all you should be getting together because if this does happen, I would start talking to attorneys now to get your ducks in the row a little bit. If you can get to this action and you’re able to be successful, it could save some of your guys’ lives, flat out.
This is something that I hope the Cannabis Podcast Network is talking about. I haven’t heard much about this. As I said, this case was made aware of and started reading about it. We have many struggling businesses out there but this could be saving some of your guys’ lives. California Marijuana Industry has challenges like crazy and they’re one of the largest groups. They’re one of the largest states that have marijuana legalization in place. California, please look to your associations and groups, start talking about this. It’s far-fetched but we’re talking about hundreds of millions of dollars that you could access. The tough part about this whole thing is it’s not constitutional. They’re allowing for all small businesses. If that’s the case and they come out with this again, you’re looking at another doing stimulus but if they do a second lockdown, I would imagine they’re going to do something similar to the PPP. What’s going to happen is you’re going to get out and stood on this again. Talk to your attorney about it, spend 20 minutes to 30 minutes on this, and dig into it a little bit deeper but there were only two stipulations and I’ll say them again.The unfortunate part of being an entrepreneur is how failing is one of those things that happens to all of us. Click To Tweet
For these dispensary owners that don’t want to go, I know it’s hard to catch but one is, it’s for all small businesses. The only second stipulation is you have to have less than 500 employees. Thousands of you out there have this. Take advantage of this situation now before it happens. Let’s say it doesn’t happen or everything’s good through Christmas and then all of a sudden lockdown. Let’s talked about and it doesn’t happen, what did you miss out on 30 to 40 minutes of your life? It’s hardly anything. However, if you have something in place and you have some people that you’ve been discussing this with, you can hit the ground running. You’re able to file a temporary injunction against the CSBA and the idea is, you can get a bunch of you in all in a row and this is the thing that was in the case that I know. It didn’t retroactively help anybody else outside this case. These guys directly were involved in the lawsuit were the only ones helped by it. Keep that in mind, too. This is a challenging business so take any advantage that you can take right now.
I don’t know where it is. I talked to some folks on Innovation Summit Conference and I was fortunate enough to be on that. We were discussing the growth and the slow growth of us getting to legalization. We believe that it’s worked well for the US. A lot of us have a good base for our businesses and it allows us to create a solid foundation for growth. What I’m saying is that we’re almost there. We’re close. We’ve got an election coming out. It’s a huge deal. Fortunately, I don’t think anybody’s concerned about cannabis right now which is awesome for us. We’re going to be able to push through but being able to see little ideas like this, taking them, and taking an advantage of what work for other people is massive for you and your survival.
I want to thank you for reading. I hope you’re able to take some of this information and use it to help your business because that’s what I’m here to do for you. I love you. I love sharing as much as I can. Please reach out to me at PlantProblem.com. I’m all over social media, too. You can touch base with me there. I want to wish all the cannabis people out there that are pushing hard, taking and running with the ball the best, and moving forward into 2021. Thanks for reading and I will catch up with you next time.