Cantor Fitzgerald’s analyst Pablo Zuanic, who recently met with lawmakers in the nation's capital said congressional leaders are poised to pass banking legislation for the cannabis industry in the upcoming elections.
According to Zuanic, the marijuana industry may not have to remain in regulatory limbo for much longer, although it could take some last-minute haggling in the aisles. He noted that the passage of "SAFE Plus" is now likely during the Congressional lame duck period between the November midterms and when the new Congress is sworn in in January 2023.
SAFE Banking Plus Means Social Equity
The ‘SAFE Banking Plus’ Act is an updated version of a bill that “would harmonize state federal and state law by protecting financial institutions that provide banking services to cannabis-related ventures and ancillary businesses,” reported the Green Market Report.
“We think that talk of a SAFE Plus (bill) is something that should be taken seriously,” Zuanic recently told investors during a Zoom call. “It’s not just a jingle. It’s not a pipe dream. It’s something that’s ongoing. There are discussions at high levels in the Senate between co-sponsors of the SAFE Banking bill on the Republican side with Senate leadership.”
The SAFE Banking Act has passed in the House seven times but hasn't moved to the Senate yet. However, “the extra pieces that entail ‘SAFE Plus’ could bring parties closer to a passage,” Zuanic said.
SAFE Plus addresses the missing social equity elements, such as:
- the inclusion of elements related to small business loans (SBA),
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allowing the VA to help veterans access medical marijuana and
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expungement laid out by the bipartisan Harnessing Opportunities by Pursuing Expungement (HOPE) Act, which would help states begin the review process of expungement with the help of federal grants to help cover financial and administrative costs.
CLIMB Act Proposal
Related to the CLIMB Act proposal, which would allow exchanges to up-list cannabis stocks and provide civil protections for businesses and those tied to the cannabis industry, Zunic said: “Prior to last week, we would have thought language from the CLIMB bill (allows uplisting) had zero chance of being part of SAFE Plus.
“While still a long shot, we think the probability is now better than zero (and better than the removal of the 280E tax rule, as how would the latter be funded?)," Zuanic said.
“In the end, maybe nothing happens, right? But I think it’s important to focus on the bipartisan side of things. If it’s about guns, abortion, gay marriage — issues or topics that are less bipartisan — it may be difficult to get done. Other than must-pass bills that have to be done in the lame duck, this will be one where there could be support from both sides of the aisle,” Zunic concluded.
He also noted that the SAFE Banking Act has nine Republican co-sponsors in the Senate, and he does not believe that “SAFE Plus elements would be a deal-breaker for them,” reported Seeking Alpha.
Finally, Sen. Cory Booker (D-N.J.) and Senate Majority Leader Chuck Schumer (D-N.Y.) introduced the Cannabis Administration And Opportunity Act (CAOA). Despite their legislation being seen as having little chance of passing, "SAFE Plus" is being considered a possible compromise measure with these Democratic senators.
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