What happened

The news keeps getting worse for investors in marijuana stocks.

Yesterday, cannabis news website Marijuana Moment warned of trouble getting the SAFE Banking Act (a bill to legalize banks providing banking services to marijuana companies) through Congress. Today, it appears that this warning was all too accurate. SAFE Banking will not be passed as part of a defense spending bill this year, and investors are fleeing marijuana stocks because of it.

As of 12:30 p.m. ET, shares of SNDL (SNDL -0.85%) are down 4.8% -- its third straight day of declines. Its smaller rival Aurora Cannabis (ACB -3.93%) is likewise down for a third straight day -- 6.2%. Meanwhile, Tilray (TLRY -2.62%) tumbled for a second straight day, leading the pack lower with a 7.9% decline.

So what

It's worth pointing out that Marijuana Moment already warned investors that this might happen yesterday. But if that's the case, then why are these stocks still going down today?

Basically, because the news got worse.

Yesterday, MM said legislators were merely debating whether they should try to pass the National Defense Authorization Act (NDAA) with included, unrelated language on marijuana banking reform. But now they've actually made their decision. Facing a withering attack from opponents in Congress, who called the idea of attaching marijuana reform to a defense bill a "heavy lift" and even a "non-starter" (reports The Hill), the House Rules Committee has produced an NDAA "without any components concerning marijuana policy," according to Marijuana Moment.    

Forewarned or not, that's the opposite of what advocates of marijuana legalization were hoping would happen, and it makes sense that they'd be disappointed by this result today -- even if they knew it might happen.

Now what

Don't lose hope -- bleak as this situation looks, there's still a chance that the SAFE Banking Act will end up getting passed.

Senate Majority Leader Chuck Schumer insists that SAFE Banking retains bipartisan support and he still wants to "get it done" -- just not necessarily as part of an entirely unrelated NDAA. As North Dakota Senator Kevin Cramer, a co-sponsor of SAFE Banking, explains, attaching a marijuana banking bill to a defense spending bill "dilutes the proper role" of the former, suggesting the idea of merging the two bills wasn't all that great an idea to begin with.  

Right now, it looks like Congress' priority will be to pass the NDAA before the end of this year, and proceed to marijuana reform next year instead. If this is the way things play out, it will surely be a disappointment for marijuana investors -- who will have to wait yet another year to find out if making it easier for marijuana companies to access banking services will result in more profits for marijuana companies.

Failing that, I fear the bear thesis for marijuana stocks must remain ascendant. According to analysts polled by S&P Global Market Intelligence, if marijuana remains illegal under federal law, and banks remain unable to provide banking services to marijuana companies, it will be 2024 or even 2025 before SNDL has a chance of turning profitable, 2025 or 2026 for Tilray, and Aurora Cannabis won't earn its first profit before 2027.  

That's a long time to ask marijuana investors to wait.