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HomeMarketWeed Stocks Wilt as the Cannabis Banking Bill Drops from Senate's Agenda

Weed Stocks Wilt as the Cannabis Banking Bill Drops from Senate’s Agenda

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A 2022 push to open banks to cannabis businesses is failing in the Senate, as proponents acknowledge that their SAFE Banking Act won’t be attached to the Congress’s omnibus spending package.

State-licensed marijuana operations such as
Curaleaf Holdings
(ticker: CURLF) or
Trulieve Cannabis
(TCNNF) have found financial workarounds, so the defeat will have little direct impact on their multistate businesses. But the legislative rebuff is a bad omen for the broad October agenda announced by President Joe Biden to liberalize federal laws that keep cannabis sales illegal.

In Tuesday morning trading, Curaleaf stock slipped as much as 5%, while Trulieve slid 4%–although the losses narrowed as trading ticked on.
Green Thumb Industries
(GTBIF) has been particularly adept at working around the inability to access federally-regulated financial systems, so its stock was off just 1%.

These companies sell marijuana where allowed under state law, but federal illegality has kept them from listing shares on large exchanges. Their stocks trade over-the-counter.

The
AdvisorShares Pure US Cannabis ETF
(MSOS) holds shares in many U.S. operators, and it was down about 2% in morning trading.

The SAFE Act passed in the House and had support from Senate Majority Leader Chuck Schumer (D, NY) and eight Republicans. They hoped to attach it to the must-pass spending bill. But Republican leader Mitch McConnell declared his opposition. Then Tuesday, the spending bill surfaced without SAFE Banking attached.

Several cannabis trade journals reported Monday evening that proponents now despair of getting the 60 votes needed to defend the weed banking bill from a filibuster. The measure hadn’t even gotten the required preliminary of a committee markup.

Write to Bill Alpert at william.alpert@barrons.com

Credit: marketwatch.com

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