Shares of marijuana companies experienced a brief surge before giving back their gains after a U.S. Senate committee voted to advance a bill that would allow legal cannabis-related companies to access banking system services. The bipartisan vote on the Secure and Fair Enforcement Regulation Banking Act, also known as the SAFER Banking Act, aims to protect banks that provide financial services to legal marijuana companies. While some cannabis firms saw an initial increase in stock value, most later closed lower. The passage of this bill would enable legal cannabis companies to have greater access to financing and lending, reducing their reliance on cash transactions and making them less vulnerable to violent crime.
Despite the legalization of recreational or medical marijuana use in about 40 states across the U.S., federal law still prohibits the substance. As a result, legal cannabis companies have been denied access to financial services, severely limiting their ability to secure funding. If the SAFER Banking Act is passed by Congress, banks will be able to service these companies operating within state jurisdictions, potentially allowing for credit card usage as well. However, experts believe that while the Senate committee’s vote is a positive first step, more significant progress will be made as the bill faces additional hurdles in the legislative process.
The passage of the SAFER Banking Act would be a major achievement for the legal cannabis industry, which has fought for access to banking services for years. Many companies have been forced to rely on cash transactions, making them targets for violent crime. The initial surge in marijuana company stocks after the Senate committee’s vote shows investor optimism about the bill’s potential impact. However, the fluctuation in stock prices throughout the trading day reflects the uncertainty surrounding future legislative actions. While the bill’s approval by the committee is an important milestone, it still needs to be passed by the Senate floor and the House of Representatives before becoming law.
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