Cannabis stocks are continuing to see big gains as the U.S. Senate committee on banking, housing, and urban affairs has scheduled a hearing to discuss the challenges faced by the cannabis industry in banking. The hearing, entitled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” will be held on Thursday at 9:45 a.m. in the Dirksen Senate Office Building. This move comes after lawmakers from both chambers filed new versions of the Secure and Fair Enforcement (SAFE) Banking Act.
As a result of this news, the cannabis market has seen significant growth. The AdvisorShares Pure U.S. Cannabis ETF (MSOS) is up 3.2%, and the ETFMG Alternative Harvest ETF (MJ) is ahead by 5.4%. Additionally, stock prices for companies like Curaleaf Holdings Inc. (CURLF) have risen by 2.3%, and Ascend Wellness, a leading vertically integrated cannabis operator, increased by 6.7%.
The SAFE Banking Act aims to provide legal protection for banks and financial institutions that choose to do business with state-legal cannabis companies. At present, many cannabis-related businesses struggle to access traditional banking as their products remain illegal under federal law. This means that cannabis companies are often forced to operate on a cash-only basis, which poses significant security risks and creates additional challenges for workers in the industry.
The passing of this act would not only greatly benefit cannabis-related businesses but also align federal law with the numerous states that have legalized cannabis for medical or recreational use. While some states allow for legal medical marijuana programs, many still operate under federal prohibition, making it difficult for companies and investors to navigate the market. The introduction of the SAFE Banking Act seeks to bridge this gap and address these significant financial and operational barriers for the industry.
This renewed focus on cannabis banking comes as more states move toward the legalization of cannabis use. Just this year, New York, New Mexico, Connecticut, and Virginia have legalized adult-use recreational marijuana, joining the 13 other states that have already legalized weed use for medical or recreational purposes.
Supporters of the SAFE Banking Act argue that this is an important step in addressing the inconsistencies between state and federal law as the nation shifts toward more widespread acceptance and legalization of the cannabis industry. By providing a clear path for banks and financial institutions to work with cannabis-related companies, the act could significantly alter the landscape of the industry and have a positive effect on the economy as a whole.
Increased financial stability would make it easier for these businesses to grow and manage their cash flow, enabling them to create jobs and invest in their communities. Furthermore, the SAFE Banking Act could help to foster innovation and competition within the cannabis industry, as businesses would have access to the same financial services as other sectors.
However, the SAFE Banking Act faces some opposition from lawmakers who believe that the bill should address the issue of marijuana prohibition on a wider scale. Critics argue that the act’s focus on banking is a narrow approach and that legalizing and regulating marijuana at the federal level would be a more efficient way to address the challenges faced by the industry.
This isn’t the first time the cannabis industry has experienced a boost in stock prices due to political developments. Last year, the House of Representatives passed the MORE Act, which would have removed marijuana from the list of controlled substances and expunged certain cannabis-related convictions. Although the legislation didn’t pass the Senate, it led to a surge in cannabis stocks.
The upcoming Senate hearing and potential passage of the SAFE Banking Act may result in a long-lasting positive impact on the cannabis industry. As the market becomes more accessible and secure for companies, it is likely that there will be increased interest from both consumers and investors. If successful, the act could pave the way for further federal cannabis reform and contribute to the growth and development of the industry on a national level.
In conclusion, as the U.S. continues to progress toward broader cannabis legalization and policy reform, the industry is experiencing significant financial gains. This recent uptick in stock prices and market growth suggests that the cannabis industry is gaining traction in the mainstream financial sector. With the introduction of the SAFE Banking Act and the potential for further federal policy changes, it’s an exciting time for the rapidly growing and evolving cannabis industry.