John Schroyer
Marijuana stocks shot up Wednesday after news broke that the SAFE Banking Act had been rewritten as the SAFER Banking Act, breathing new life into federal cannabis reform just weeks after the monumental news that the Biden administration recommended the rescheduling of marijuana.
The bill was formally introduced with bipartisan support on Wednesday afternoon in the U.S. Senate, according to a statement jointly released by several senators. Majority Leader Chuck Schumer also pledged to bring the bill to the Senate floor for a full vote.
The bill is currently slated for a hearing in the Senate Banking Committee next week on Sept. 27.
The new bill is intended to guarantee that federal bank regulators won’t interfere with banks or other financial institutions for providing services to state-legal marijuana businesses, a move that many major banks have steered clear of due to the federal illegality of cannabis. SAFER’s prime sponsors include Sens. Jeff Merkley (D-OR), Steve Daines (R-MT), Kyrsten Sinema (I-AZ), and Cynthia Lummis (R-WY), as well as Schumer (D-NY).
“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans. It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk,” the senators said in a joint statement.
The list of co-sponsors for the bill features more lawmakers from both sides of the aisle, including Kevin Cramer (R-ND), Cory Booker (D-NJ), Dan Sullivan (R-AK), and Bob Menendez (D-NJ).
The new SAFER Banking Act, according to a summary from the Senate Democrats, differs slightly from the original version with four new provisions in the 10th section of the bill, which deals with deposit requirements, Politico reported. That portion:
- Asserts that “personal beliefs or political motivations” about cannabis should be cast aside by financial institutions, and “banks and credit unions should provide banking services in the communities in which they serve to the fullest extent possible.”
- Prohibits federal banking regulators from terminating any marijuana-related accounts without “valid reason,” and if such reason exists, that it be provided in writing to both the bank and the account holder.
- Requires federal bank regulators to report to Congress annually the “number of deposit accounts requested or required to be terminated, and the legal basis for the account terminations.”
- Mandates that, within two years of SAFER becoming law, federal bank regulators must “promulgate tailored rules or guidance to increase access to deposit accounts for businesses.”
- Orders the Federal Deposit Insurance Corporation (FDIC) to “conduct a biennial survey and report to identify barriers to accessing deposit accounts.”
Still, the legislation isn’t perfect, said Sundie Seefried, CEO of cannabis banking company Safe Harbor Financial.
The SAFER Banking Act, Seefried said in a statement, “will not flood the cannabis industry with banking options as the primary roadblock remains Bank Secrecy regulations, requiring substantial resources to ensure compliance.”
“Unless Bank Secrecy regulations are substantially changed, the fact remains that the cannabis industry is both cash intensive and, at the same time, continuing to fight an active, illicit market operating in plain sight,” Seefried said. “Bank Secrecy is the elephant in the room. … It’s been a priority regulation for decades and while revisions may lighten compliance obligations, I don’t see substantial changes in the near future.”
Despite that, public cannabis company stocks increased marginally on the news. According to Seeking Alpha:
- Ayr Wellness Inc. (OTC: AYRWF) was up 6.18%.
- Curaleaf Holdings (OTC: CURLF) was up 2.36%.
- Columbia Care Inc. (OTC: CCHWF) was up 2.38%.
- Green Thumb Industries (OTC: GTBIF) was up 0.65%.
- MedMen Enterprises (OTC: MMNFF) was up 1.05%.
- Trulieve Cannabis Corp. (OTC: TCNNF) was up 3.54%.
- Verano Holdings Corp. (OTC: VRNOF) was up 1.76%.
Not every public cannabis stock was a winner on Wednesday, though:
- Ascend Wellness Holdings (OTC: AAWH), an outlier, was down 0.85%.
- Cresco Labs (OTC: CRLBF), an outlier, was down 0.92%.
- TerrAscend Corp. (OTC: TSNDF) was down 0.5%.
