(Washington) Canadian cannabis companies and their investors welcomed a Senate committee’s decision Wednesday to move forward with measures to ease federal funding restrictions on the U.S. industry.
The Senate Banking Committee voted 14-9 to put the SAFE Banking Act up for a full vote in the Senate, although it remains unclear exactly when that vote will take place.
The bill is just the latest iteration of a long-standing effort to make it easier for cannabis companies that are legal to operate under state laws to access federally regulated financial services.
Supporters argue the bill would make the industry, much of which is forced to operate cash-only in the United States, safer and less vulnerable to money laundering, tax evasion and armed robbery .
“A cash economy is good if you are a criminal. That’s fine if you want to rob stores,” said Democratic Sen. Jeff Merkley of Oregon, one of the bill’s co-sponsors and a longtime advocate for cannabis finance reform.
During one particular 12-month period in Oregon, Mr. Merkley recalled, 153 separate thefts were reported — “basically one every two days” — by cannabis workers who were targeted because they were transporting perhaps large sums of money.
“None of these thefts should have happened if we were not in a monetary world. And this isn’t just happening in Oregon, it’s happening in every state where the cash economy is practiced. »
Canadian industrial players, however, are awaiting reforms for a very different reason: the prospect of unfettered expansion in a market 10 times larger than theirs.
The vote announced Wednesday “represents an important step for cannabis reform in the United States,” said Omar Khan, senior vice-president of corporate and public affairs for Calgary retailer High Tide.
“If passed, this bill will provide greater legitimacy, improve employee and customer safety, and provide much-needed guidance for commerce. »
The Ontario company Canopy Growth has gradually laid the foundations for a presence in the American market while waiting for the laws to change. According to its CEO, David Klein, the question is not if it will happen, but rather when it will happen.
“Regulatory changes will continue to be implemented gradually,” Klein said in a statement. Our innovative Canopy USA strategy gives us a U.S. platform of leading brands with exposure to the fastest growing markets today, while remaining poised for rapid growth and launch in the wake of federal approval. »
Shares of cannabis companies on both sides of the border rose briefly during the hearing Wednesday before falling back to more modest levels — possibly a reflection of the difficult political realities on Capitol Hill.
Members of Congress are currently facing a new spending standoff with the White House, with the prospect of a federal government shutdown after Saturday’s deadline.
From Annex 1 to Annex 3
High Tide would also like to see cannabis removed from Schedule 1 of the Controlled Substances Act, where it is listed alongside heroin, LSD and ecstasy as a drug with “no currently accepted medical use”. “.
It’s another highly anticipated step that the U.S. Department of Health and Human Services publicly recommended taking last month, following a review ordered last October by President Joe Biden.
High Tide wants the U.S. Drug Enforcement Administration, which fights drug trafficking, to expedite consideration of the recommendation, which would move cannabis to Schedule 3, a category of “moderate to low abuse potential.” “.
This would allow cannabis producers to list on major North American stock exchanges, Khan said.
“Our goal is to become one of the top five (cannabis companies) operating in multiple states in the United States, once regulations allow.” »
The bill also aims to prevent federal banking regulators from acting as a “moral police” that can deny financial services to organizations “because they simply don’t like the industry they’re in,” it said. Senator Merkley.
That speech seemed to resonate with Republicans on the committee, several of whom argued that gun manufacturers and oil companies would also benefit from similar protections.
In Wyoming, cannabis has never been legal, either for recreational or medical purposes, but that should not be a barrier to legalizing activities in other states, such as neighboring Colorado or Montana, said Republican Senator Cynthia Lummis of Wyoming.
“I like where Wyoming is right now; I do not support the legalization of marijuana,” said M.me Lummis.
“I don’t want other states to tell us that certain economic activities should be banned if they exist now. […] The main reason I support this legislation is that it is a major step toward ending the militarization of the banking industry. »
Some reservations expressed
The National Cannabis Industry Association called Wednesday’s vote an important step that bodes well for the bill to pass, given that 76 U.S. senators, including 28 Republicans, come from states that regulate cannabis use.
This “gives hope to thousands of tax-paying businesses who are desperate to access basic financial services that other businesses take for granted,” observed Aaron Smith, CEO of the ‘Association.
“This unique bipartisan legislation has the potential to save lives and help small businesses; it is time for Congress to submit it to the President’s desk without further delay. »
Not everyone is so enthusiastic.
Democratic Sen. Raphael Warnock of Georgia expressed some of the loudest reservations at Wednesday’s hearing, saying the bill focused on all the wrong aspects of the legacy of 50 years of America’s war against drugs.
PHOTO ALEX BRANDON, ASSOCIATED PRESS ARCHIVES
Raphael Warnock, Democratic Senator from Georgia
“I am not opposed to relaxing or rolling back federal restrictions on cannabis,” Mr. Warnock said. But this bill, in my opinion, will only make things worse. It will set the conditions for a step backwards — a step backwards in the quest for equity, justice and security. »
Senator Warnock wants the legislation to be linked to broader reforms, such as expunging criminal records for cannabis convictions and investing in low-income communities that have been unfairly targeted over the past half-century .
While cannabis use in the United States tends to be split evenly between white and black Americans, members of the latter group are “nearly four times more likely than white Americans to be arrested,” a- he reported.
“This bill will make life safer for bankers, businesses and financial institutions, some of whom have been illegally profiting from the cannabis industry for years,” Warnock said.
“Which is ironic, given that many ordinary people who have illegally sold or consumed cannabis are currently in prison cells. »
Democratic Senate Majority Leader Chuck Schumer of New York pledged to bring the bill to a quick vote, along with provisions to speed up the state’s delisting process and lifting restrictions on gun ownership for legal cannabis users.