SAFE, the Secure And Fair Enforcement Banking Act of 2019, is getting closer and closer to becoming a reality for the U.S. cannabis industry.
One-third of the U.S. Senate is now officially on board as co-sponsors of the Act. A Forbes article noted that Sen. Tina Smith (D-MN) has just signed on as the 33rd co-sponsor. The House is already planning a vote on their own version of the bill. Meanwhile, Senate Banking Chairman Mike Crapo (R-ID) has previously indicated he now supports a vote on this legislation.
Pressure to pass this bill is also coming from the U.S. banking industry itself. The Independent Community Bankers of America (ICBA) has supported this bill from Day 1. The Credit Union National Association is also on board.
The Forbes article expands on the ICBA’s position.
For cannabis investors, passage of SAFE would be a major shot-in-the-arm for U.S.-based cannabis companies. With marijuana stocks grossly oversold in the U.S. and Canada, both cannabis industries simply await a catalyst for a new rally.
In Canada, Phase 2 of cannabis legalization along with the strong surge in cannabis retail revenues should provide this push. For the U.S., the SAFE banking bill is a major driver.
Along with this, the FDA is promising new rules to bring some clarity and certainty with respect to the (national) regulation of CBD products. Hemp is now legal in the U.S., but foot-dragging by the FDA on regulating these products means that even hemp-derived CBD products are still in regulatory limbo.
More of a long shot (at least in 2019) is the full legalization of cannabis at the national level. While strong support exists now in Congress for national legalization, the Republican-controlled Senate (and especially Mitch McConnell) is still seen as a road-block.
Instead, a watered-down bill to move cannabis from its current status as a Schedule 1 narcotic is gaining momentum. This would merely change the classification of cannabis from its current Schedule 1 designation to a Schedule 3 drug: still illegal.
It’s totally inadequate for the U.S. cannabis industry. It’s totally inadequate for the American consumer. It would do nothing to prevent consumer health issues such as the current scare surrounding tainted vape pens.
This makes passage of SAFE even more important for the U.S. cannabis industry. Support for cannabis legalization continues to grow among American voters. Even 56% of Republican voters now want cannabis legalized.
Currently, momentum for the cannabis industry in the U.S. is uneven at best. Illinois has passed a very progressive cannabis legalization legislation. But both New York and New Jersey failed to legalized cannabis for adult use.
Shadowy anti-cannabis organizations continue to lobby aggressively to block the normalization of cannabis – at both the state and federal level. Normalizing the cannabis industry through granting it full, legal access to banking services makes the work of the anti-cannabis lobby more difficult.
Cannabis legalization in the United States is inevitable. Cannabis is already becoming a new consumer tradition among Americans. Passage of the long-awaited SAFE bill will be applauded by many business groups, both inside and outside the cannabis industry.
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