Hemp companies that are publicly traded and received emergency small-business loans may have to repay those funds under new guidance from the U.S. Treasury Department.
Now the Treasury Department is directing some of those borrowers to certify “in good faith” that they needed the loans to keep operating, which means showing business activity and their access to other capital resources.
Joseph Dowling, CEO of San Diego-based CBD firm CV Sciences said although his company is public, it doesn’t have access to the same capital as other public companies.
CV Sciences, which trades on the over-the-counter markets under the ticker symbol CVSI, recently laid off a quarter of its people. The $2.9 million loan the company received under the Paycheck Protection Program will allow the company to keep current employees and potentially bring back others, Dowling said.
“We’re like everybody else; we’re affected by this,” Dowling said. “We’re a little bit dependent upon brick-and-mortar retailers who are dependent upon customers.”
CV Sciences reported last month that it saw sales drop by 34% in the most recent fiscal quarter as the company blamed an overheated market for missing analyst expectations.
The decline came despite broad availability of the company’s topical CBD products, now available in more than 5,500 retail locations throughout the United States, including CVS Pharmacy and Kroger grocery stores.
More than 175 publicly traded companies received over $650 million in the PPP loans as of Thursday afternoon, according to a CNN review of filings made with the U.S. Securities and Exchange Commission.