If there’s one thing that can get marijuana stocks moving, it’s the hope of legalization or some sort of reform in the industry. Unfortunately, up until now, that’s all there has been — hope. But with a Democratic-controlled…
Senate and House, plus a president who is in favor of decriminalization, there’s reason to be optimistic that change could be coming sooner rather than later.
And that change could come in the form of the National Defense Authorization Act (NDAA). The bill has passed for 60 years in a row, and heading into the final month of the year, it’s a significant piece of legislation that is still outstanding that will likely be a key priority for lawmakers this month. It also includes a cannabis bill.
The cannabis banking bill is included in the NDAA
In September, the NDAA passed the House, and included in the bill was the Secure and Fair Enforcement (SAFE) Banking Act. If that sounds familiar, it’s because the SAFE bill has now passed the House five times but has failed to progress any further.
The NDAA is often referred to as being “must-pass” legislation and so the big question may not be if it passes but if in its final version, whether the SAFE Banking Act is still in there. If it is, that would be a huge win for cannabis stocks.
Why does SAFE Banking matter?
The SAFE Banking Act won’t legalize marijuana nor would it even decriminalize it. But what it will do is make it easier for banks to work with the cannabis industry. Although it’s not impossible for cannabis companies to obtain bank accounts, it’s definitely not easy.
The companies that will benefit most will undoubtedly be the multistate operators, including Cresco Labs. In July, its CEO Charlie Bachtell told BNN Bloomberg that while some banking services are available, passing of the bill would enable what he refers to as “Big B banking” for the industry. “Big B banking is where you have access to capital, you have access to leverage, where you could get credit facilities that allow you to smooth out cash flow and really create scale in a way that you would think from a traditional industry can,” he said.
And the obstacles go beyond just a lack of banking services being available. In November, top bank JPMorgan Chase went so far as to restrict trading of U.S.-based pot stocks, stating that, it “has introduced a framework that is designed to comply with U.S. money laundering laws and regulations by restricting certain activities in the securities of U.S. marijuana-related businesses.” Passing SAFE Banking would make it easier for…
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