What happened

Cannabis retailer Curaleaf (CURLF -0.85%) saw its shares drop more than 11% on Wednesday before bouncing back a bit in the late afternoon. The stock opened at $6.56 before dropping to a low of $5.74 in early trading.

So what

The stock has been sliding for the past couple of weeks, but a lot of cannabis stocks fell Tuesday and Wednesday after Senate Minority Leader Mitch McConnell (R-Ky.) criticized an effort to make the SAFE Banking Act part of the National Defense Authorization Act, a defense spending bill.

"If Democrats wanted these controversial items so badly, they had two years to move them across the floor," McConnell said. "Heck, they could have scheduled those matters for votes this week."

The SAFE Banking Act was excised from the defense bill, but it is still possible it could come up again as a separate bill. The problem is, any controversial bill would likely take 60 votes to pass the Senate because of the filibuster, and at this point, it doesn't appear the votes are there for federal banking reform for cannabis.

Without any federal reform on the cannabis front, it will remain difficult for cannabis companies to get funding in the United States because the drug remains illegal at the federal level, even though many states already allow either medicinal or recreational cannabis sales. 

Now what

In some ways, not having the SAFE Banking Act is a good thing for Curaleaf, though nobody from the company is saying that. Without funding from banks, many smaller cannabis companies could eventually go out of business. That would be good news for the larger multi-state operators (MSO) such as Curaleaf, which has 143 dispensaries across 29 states .

The company also had $340 million in revenue in the third quarter, up 7% year over year and tops among U.S. MSO, as well as adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $84 million, up 18.3% over the same period a year ago.