CURLF - SAFE Act Could Help Shift US Cannabis Sentiment
A bill meant to protect banks from doing business with cannabis companies in the US was put on hold with a one-day delay in first vote.
During a meeting of the House Financial Services Committee on Tuesday (March 26), the ‘‘Secure and Fair Enforcement Banking Act of 2019,’’ otherwise known as the SAFE Banking Act, was set to be voted on by the committee. However, the discussion and vote were moved to Wednesday (March 27).
The bill could grant protections to banking activities and allow cannabis companies to secure credit lines and other banking options previously unavailable due to the federal illegality of marijuana.
During her opening remarks on Tuesday, Committee Chair Maxine Waters said the group’s goal with the bill is to protect consumers. She described it as a holistic approach to criminal justice reform due to the impact of the criminalization of cannabis, particularly on those directly affected by its illegality.
Marc Adesso, veteran cannabis attorney with law firm Waller Lansden Dortch & Davis, told the Investing News Network (INN) he still expects there to be a lot of time before any action is taken in Congress.
However, the lawyer said the passing of the banking bill may aid another crucial pending cannabis bill.
“I think that the passing of the SAFE Banking Act could help to signal a larger shift in public opinion that may ultimately help legislation like the STATES Act to gain traction,” Adesso told INN.
The STATES Act is a policy bill aimed at offering similar banking protections and allowing the legal operation of marijuana companies at a state level.
Several multi-state operators in the US have placed heavy bets on the passing of this bill.
Kevin Murphy, CEO of Acreage Holdings (CSE:ACRG,OTCQX:ACRGF), recently told CNBC he still expects to see the passing of the STATES Act sometime later this year or early in 2020.
Bloomberg reported that analysts at Cowen and Eight Capital share a bright outlook on the impact of the SAFE Banking Act.
Cowen analyst Jaret Seiberg indicated to investors that issues remain with Senate support for the bill moving forward, including the fact that Majority Leader Mitch McConnell doesn’t “want to debate cannabis on the floor.”
Mitch Baruchowitz, managing partner at Merida Capital Partners, told the Financial Post this bill would heavily disrupt the state of cannabis business relationships between US and Canadian companies.
“American multi-state operators like Acreage [Holdings] and Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) are much bigger than most Canadian cannabis companies,” he said. “I can’t see the appetite for US banks to lend to most Canadian licensed producers over these multi-state operators.”
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.