- A U.S. Senate committee has approved The Secure and Fair Enforcement Regulation Banking Act (SAFER) for a vote on the Senate floor by a count of 14-9
- The legislation would grant cannabis companies access to traditional banking, including credit, loans and financial services
- Canopy Growth, Tilray, Aurora and Organigram are trading down after the approval
A U.S. Senate committee has approved The Secure and Fair Enforcement Regulation Banking Act (SAFER) for a vote on the Senate floor by a count of 14-9.
The SAFER Act would grant cannabis companies access to traditional banking, including credit, loans and financial services, and is likely to have a positive effect on cannabis stocks keen to expand their footprints across the North American market.
The act has made it through the U.S. House of Representatives on numerous occasions, but Wednesday marks its first chance at going to a Senate vote, which could make it the first bipartisan cannabis policy to achieve congressional approval.
Cannabis companies are currently limited to cash transactions in the United States, which is a considerable security risk, especially for public-facing dispensaries, while Canadian operators benefit from a wider availability of financial institutions like Alterna and BMO willing to take their business.
The pending Senate vote follows last month’s recommendation by the U.S. Food and Drug Administration (FDA) to reclassify cannabis as a Schedule III drug, leading to a review by The U.S. Drug Enforcement Administration (DEA). The DEA currently classifies cannabis as a Schedule I drug, which is the same category as heroin and methamphetamine.
A Schedule III classification would make cannabis a “drug with a moderate to low potential for physical and psychological dependence,” according to the DEA, substantiating SAFER’s passage into law and enticing sidelined and regulation-weary capital back into the industry.
As of 11:15 am ET, major cannabis players are weathering lower stock prices despite the Senate committee’s favorable review:
- Canopy Growth stock (TSX:WEED) is down by 0.8 per cent trading at $1.24 per share
- Tilray stock (TSX:TLRY) is down by 0.62 per cent trading at $3.22 per share
- Aurora Cannabis stock (TSX:ACB) is down by 1.05 per cent trading at $0.94 per share
- Organigram (TSX:OGI) is down by 4.69 per cent trading at $1.83 per share
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