A measure to open up the banking system to cannabis companies now conducting business in cash is drawing tentative support from Senate majority leader Chuck Schumer, according to reports.
The potential compromise over the Secure and Fair Enforcement (SAFE) Act could provide a lift to cannabis stocks, which have collectively lost about half their value this year amid dim prospects for legalization on the federal level.
“Sen. Schumer (who pretty much alone holds the keys to passage of the SAFE banking reform bill) may be open to a reasonable and realistic compromise in passing SAFE,” Cantor Fitzgerald analyst Pablo Zuanic said in a note to clients on Friday. “From a trading and technical point of view, this could signal the bottom for the group — notwithstanding questions about how much SAFE could really accomplish.”
The AdvisorShares Pure U.S. Cannabis ETF
is down 48.3% in 2022 and has lost nearly 68% of its value in the past year.
Schumer, a New York Democrat, has kept SAFE Banking on the back burner in the Senate as he works on crafting his own bill with fellow Democrat Corey Booker of New Jersey and other lawmakers. Schumer said recently he plans to kick off his cannabis bill over the summer, later than expected initially.
Politico and Marijuana Moment both reported Thursday that Schumer spoke with with Rep. Dave Joyce, R., Ohio, about potentially combining SAFE Banking with Joyce’s Harnessing Opportunities by Pursuing Expungement (HOPE) Act.
Also: Research firm sees potential passage of cannabis SAFE Banking Act during Congress lame duck session
Joyce mentioned the talk he had with Schumer on Thursday when he stopped by the International Cannabis Bar Association conference. Spokespeople for Schumer and Joyce confirmed the meeting took place, as reported by Politico and Marijuana Moment.
A spokesperson for Joyce told Marijuana Moment that the talk with Schumer was “part of an ongoing, broader discussion between both parties and chambers to determine what reform can pass this Congress. “
The SAFE Banking measure has won passage in the U.S. House of Representatives six times, but it has yet to come to a vote in the U.S. Senate.
In the most recent attempt, lawmakers in the House attached the measure to the larger America Competes bill. The Senate version of the measure, which is called the Innovation Bill, remains under debate.
Cantor Fitzgerald’s Zuanic said the talks between Joyce and Schumer could be a sign that “he is starting to feel the pressure/lobbying, and something could be passed this year.”
At last check, the SAFE Banking measure counted 42 sponsors in the U.S. Senate including nine Republicans.
Seen as an intermediate measure that does not legalize cannabis on a federal level, SAFE Banking would allow banks with federal charter to lend and provide financial services to plant-touching businesses and allow U.S. investment banks to provide services.
Community banks and some local banks have been providing some services to cannabis companies, but much of the multi-billion dollar legal cannabis industry to do their business in cash, which presents safety risks to employees from thieves.
However, SAFE Banking as it stands would not potentially allow U.S. pot companies to directly list their shares on the Nasdaq or the New York Stock Exchange, under current interpretations.
Read next: Two cannabis CEOs praise letter supporting SAFE Banking from U.S. senators