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- The drumbeat for the SAFE(R) Act continues
The drumbeat for the SAFE(R) Act continues
Maybe the tenth (?) time's a charm. That, and much more.
Hi everyone,
I’m writing this on a train down to DC where I’ll be speaking at the PBC Conference. It’s a quick in-and-out for me this time around, but let me know if you’d like to connect.
I hope you all enjoyed Tuesday’s newsletter, where I laid out about the kind of pseudo-compromise legalization it seems like we’re getting.
As always, let me know what you think — and leave responses in the comment or chat. I try to read everything.
As I reminder, you can find me in DC today and tomorrow, and Chicago for the Benzinga Conference from the 27th - 29th.
Let me know where to get the best hot dogs and deep dish pizza, I’m hunting for recommendations.
-Jeremy
Today’s Cultivated is sponsored by Durée & Company.
Durée & Company is one of the top public relations and marketing firms in the cannabis industry.
I can say that with confidence: I’ve worked with the team and their deep roster of clients on many stories, and I always value their insight and expertise about all things cannabis.
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💡What’s the big deal?
What happened: I wanted to move on from writing about the SAFE(R) Act, but it’s the biggest news in cannabis-land right now.
The full Secure and Fair Enforcement Regulation Banking Act — lawmakers seem to have added the R after weeks of deliberation — was filed in the Senate on Wednesday morning.
The bill, which would let cannabis companies access the banking system like any other normal industry, is headed for a Banking Committee markup on September 27.
It really does feel a bit different this time, especially in the Senate. The House might be a different story, but again, you can never predict politics.
Why it matters: Republicans and Democrats seem to have struck a compromise on specific language in the bill that bodes well for it passing the Senate.
One the of the key sticking points is around Section 10 of the bill, which prevents banks and other financial institutions from denying services to lawful businesses based “personal beliefs or political motivations.”
That applies to cannabis businesses, but it could also apply to gun sellers.
Cat Packer, a former cannabis regulator in California and now vice chair of the Cannabis Regulators of Color Coalition (CRCC), told Marijuana Moment that this can cut both ways:
While the provision “may have been” designed to appeal to GOP members, “the language can work towards both ends,” Packer said.
“I do think that that’s generally in line with what CRCC and DPA have been advocating—just recognizing, in part, that banking is extremely discretionary,” she said. “And banks have had the opportunity—and will have the opportunity—to make a discretionary decision about who they bank. Historically, it’s been minority, Black and brown communities who have been underbanked.”
And some industry experts say Section 5 of the bill, which gives federal protection to institutions that choose to work for cannabis companies, could open up cannabis companies to Wall Street.
That could potentially crucial pieces for the industry like listing on US exchanges and working with investment banks. That could be the catalyst every cannabis stock investor has been waiting for.
But wait: None of this is a done deal.
The markup on the 27th is set to be interesting.
Sens. Chuck Schumer and Cory Booker said they’ll push to add social equity measures like expungements to the bill, which may or may not be palatable to Republicans.1
That could take the form of the Harnessing Opportunities by Pursuing Expungement (HOPE) Act, which would incentivize states to expunge cannabis arrest records.
And Sen. Steve Daines, a Republican sponsor of the bill, indicated that he’d be open to negotiating on this.
But some Republicans told Politico’s Natalie Fertig that if the Section 10 language changes too much, their vote might switch to a no.
And many Republicans have advocated to include the Gun Rights and Marijuana (GRAM) Act, which would allow medical cannabis patients to purchase and own guns.
All that being said, the chances seem strong for the SAFER Act to be the first cannabis-related bill to pass the Senate.
The House might be a different story. Though previous versions have passed multiple times before, this is now Speaker Kevin McCarthy’s domain.
Get your popcorn ready.
What else is happening?
The House Oversight Committee approved a bill that would prevent federal employers from denying security clearances based on an employee’s past cannabis use.
🗣️ Quote of the week
“Our constituents should never be denied the opportunity to serve our country simply because they’ve once used marijuana, as at least half of Americans report they’ve done,” said Rep. Jamie Raskin.
🥊 Quick hits
Payment processor Square is entering Canada’s retail cannabis market through a partnership with cannabis tech company Jane Technologies.
A study from NovaAnalytic Labs, a cannabis testing firm, found that 20.73% of voluntarily-tested medical cannabis samples in Maine contained pesticides like Myclobutanil.
Massachusetts Cannabis Control Commission Chairwoman Shannon O’Brien was suspended with pay on Friday. O’Brien’s tenure has been rocky: She previously owned a stake in a cannabis company that had an application before her agency, though was cleared of wrongdoing.
Ohio voters will decide on November 7 whether or not they want to legalize cannabis.
🗽Spotlight on New York
What happened: Chicago Atlantic, the firm lending to New York’s $200 million social equity fund, owns about 15 million shares 10% of Vireo Health, reports NY Cannabis Insider.
Vireo Health operates in the state’s medical market and is now involved in the retail market.
Why it matters: While this arrangement may appear to violate the state’s True Parties of Interest rule — which forbids companies from owning both the supply and retail side of the cannabis industry to combat monopolies — the state doesn’t think so:
“Chicago Atlantic is a lender to the New York State Cannabis Social Equity Investment Fund and the Fund is a lender to CAURD licensee businesses,” The Dormitory Authority of the State of New York (DASNY) said in a statement. “Neither the Fund nor Chicago Atlantic are TPI, equity investors, or have an ownership interest, direct or indirect, in CAURD licensee businesses.”
What else is happening?
Some best-selling cannabis strains contain microbial levels 10-250 times higher than what’s allowed under the state’s rules for medical cannabis, reports NY Cannabis Insider’s Brad Racino.
The Office of Cannabis Management (OCM) appears to have scrubbed the entire public comment period of the agency’s last meeting — including some intense criticism.
Axel Bernabe, one of the key architects of New York’s cannabis legislation is stepping down from the OCM. Ben Sheridan, another OCM staffer, announced he would be leaving the agency as well.
📚 What I’m reading
Is legalizing marijuana a mistake? (Open to Debate)