Cannabis stocks moved up Wednesday after the U.S. Senate Committee on Banking, Housing and Urban Affairs approved the Secure and Fair Enforcement Regulation Banking Act, now known as the SAFER Banking Act of 2023.
The bill to open up the financial system to legal cannabis companies now heads to the full Senate for a vote. Earlier versions were first introduced on Capitol Hill a decade ago.
Senate Majority Leader Chuck Schumer, a New York Democrat, has voiced support for the SAFER Banking Act and said he plans to introduce the measure to the full Senate.
The measure has been approved by the U.S. House of Representatives seven times but has yet to go to the full Senate for a vote.
Democrats now control the U.S. Senate, but the passage of the measure in the Republican-controlled U.S. House of Representatives is uncertain.
However, some Republicans on Capitol Hill have voiced support for the measure, including Sen. Cynthia Lummis of Wyoming, who said at the hearing that while she opposes cannabis legalization, the federal government should honor the will of voters in states that have approved cannabis.
The AdvisorShares Pure US Cannabis exchange-traded fund MSOS was up 6% in trading shortly after the vote.
The ETFMG Alternative Harvest ETF MJ was up 3.2%.
Among individual cannabis names, Curaleaf Holdings Inc.
Cannabis advocates applauded the move, which came after the industry stepped up lobbying efforts earlier this year.
The measure “will provide urgently needed relief to cannabis businesses of all sizes, as well as for employees who work in the industry and cannot access traditional banking services for their families,” Curaleaf Executive Chair Boris Jordan said in a statement.
Trulieve CEO Kim Rivers said: “Realizing this first vote out of the Senate signals strong bipartisan support from both chambers of Congress.”
However, Kevin Sabet, president of Smart Approaches to Marijuana Action, which opposes some legalization efforts, referred to the bill as the “addiction banking act” and said lawmakers should not have approved it.
“Members of the committee heard first-hand from those whose lives have been devastated by today’s high-potency THC drug products engineered to increase usage rates, yet they don’t seem to care,” Sabet said in a post on the social-media platform X.
Elsewhere in the federal government, the U.S. Drug Enforcement Administration is currently reviewing the Schedule I status of cannabis under federal drug law in a move that could remove the 280E tax restrictions on legal cannabis companies.
Victor Reklaitis contributed.