Markets

Cannabis Banking Bill Passed House of Representatives

The Secure And Fair Enforcement (SAFE) Banking Act, a landmark bill that would make it possible for banks and credit unions to offer basic financial services to cannabis industry companies in states that have legalized the drug, passed in the U.S. House of Representatives Wednesday.

At present, since cannabis is illegal at the federal level, financial institutions are unwilling to risk doing business with enterprises involved in -- or associated with -- the plant.

The SAFE Banking Act enjoyed widespread support in the chamber, even among Republicans, whose party has been more resistant to efforts to reform the nation's drug laws. All told, 321 voted in favor with just 103 against; 91 of the yeas came from Republicans, and only one Democrat voted against.

Gavel with marijuana leaf

Image source: Getty Images

The bill now moves to the Senate, where it is likely to meet more resistance. Firstly, the Republicans control that chamber. Secondly, powerful GOP senators, among them Majority Leader Mitch McConnell, oppose any measures that could be seen as weakening existing federal drug laws. Beyond that, it is unclear whether President Donald Trump would sign such a bill if it were passed and sent to his desk.

That said, cannabis-related banking reform does enjoy some GOP support. Earlier this month, Sen. Mike Crapo of Idaho, the chairman of the Senate Banking Committee, said that he and his peers were laboring on a similar bill, to be voted on in that chamber by the end of this year. He indicated that they were open to considering existing legislation too; a Senate version of the SAFE Banking Act was introduced earlier this year. 

News of the SAFE Banking Act's success in the House is, of course, a splash of good news for marijuana stocks. Dispensary operator Trulieve Cannabis (OTC: TCNNF), for one, had professed its unabashed support for the measure.

On the company's Twitter account, Trulieve posted, in part: "This is a momentous day for the cannabis industry-paving the way for a safe, secure banking relationships for our industry and better credit access for our patients and customers. The Senate is next. Onward!"

Kevin Murphy, CEO of Acreage Holdings (OTC: ACRGF), also weighed in via a press release, saying that the Act "promotes the safety, transparency and certainty that the cannabis industry, the fastest growing sector of the U.S. economy, needs to prosper."

In spite of this optimism, investors might stay in wait-and-see mode until the legislation is put to a vote in the Senate. Trulieve's stock, for example, actually closed slightly lower on Wednesday, while Acreage basically traded sideways.

Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming.

Cannabis legalization is sweeping over North America – 10 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.

Simply click here to get the full story now.

Learn more

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TCNNF ACRGF

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More