Cannabis stocks tanked on Monday after it was revealed that the Secure and Fair Enforcement (SAFE) Banking Act had been excluded from a must-pass federal spending package, all but confirming the legislation will be kicked into 2023.
The bipartisan-supported SAFE Banking Act will protect banks and other financial institutions from penalties for providing services to legitimate cannabis businesses.
The failure to include the act in the spending bill marks the second failed attempt to pass the SAFE Banking Act as part of a larger legislative package during the lame-duck session after it also was excluded from the must-pass National Defense Authorization Act (NDAA) earlier in December.
READ: Cannabis MSOs tumble as marijuana banking reform is excluded from defense bill
The bill was also expected to include expungement reform and remove a rider that prevents the District of Columbia from spending local tax dollars to legalize adult-use cannabis sales in the district.
It is still possible that the SAFE Banking Act could be introduced as standalone legislation as a last-ditch attempt to pass the legislation during this lame-duck session, but it is highly unlikely given there is little time left before US lawmakers adjourn for the year.
US cannabis stocks tanked on the news, with the AdvisorShares Pure US Cannabis ETF shedding 18.1% at US$7.22 and the AdvisorShares Pure Cannabis ETF falling 7.9% at US$3.87 by Monday’s close.
At the open on Tuesday, both ETFs had recovered part of their losses, adding 2.4% and 3.4% respectively.
Contact the author at emily.jarvie@proactiveinvestors.com
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