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.
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.