Senate Majority Leader Mitch McConnell, a longtime opponent of
reforming marijuana laws, is spending more time than usual thinking
about cannabis on a trip to California this week.
McConnell is attending at least two days’ worth of meetings with
cannabis industry executives, small-business owners and advocates in
Southern California, in order to discuss potential cannabis-related
banking reform, among other topics, according to people familiar with
the matter. McConnell’s schedule includes two cannabis-related lunches
with executives and advocates, one of which will take place in Newport
Beach, Calif., and a tour of at least one cannabis-related company in
the area.
It was not immediately clear whether McConnell’s California Wednesday
and Thursday schedule signals a shift in his thinking about cannabis
banking reform, the people said. McConnell’s Washington office did not
respond to several requests for comment.
“I think this is absolutely positive that McConnell is meeting with
stakeholders in the cannabis market,” PI Financial analyst Jason
Zandberg told MarketWatch over the phone. “The U.S. market needs the
banking act to flourish, without it — there are legitimate companies
that are following the rules that are facing major obstacles. Banking
legislation would be a huge positive catalyst.”
The cannabis industry representatives will attempt to convince
McConnell that reform is necessary because the current legal regime
unfairly penalizes businesses that obey federal laws, such as hemp
farmers producing the crop for legal CBD products, according to a person
familiar with the lobbying strategy.
“We’re happy to see that Leader McConnell is coming to see how a
regulated market is an improvement over prohibition,” National Cannabis
Industry Association executive director Aaron Smith told MarketWatch in
an interview. “Right now the priority is banking, which affects
[McConnell’s] constituents in the hemp and CBD industry, as well as
legal cannabis businesses here in California. That’s really our primary
ask — common-sense policies around banking and public safety, and we’re
hopeful [McConnell] will see the need for that and move forward along
with Chairman [Sen. Mike] Crapo.”
The senator’s visit to the Golden State comes weeks after the Democratic-controlled House of Representatives
passed the Secure and Fair Enforcement (SAFE) Banking Act,
a bill aimed at giving banks and credit unions additional clarity
around servicing cannabis companies that wish to open accounts for
things like paying bills. Because marijuana is illegal at the federal
level, financial institutions can encounter legal problems, and cannabis
companies — including those that operate cannabidiol, or CBD,
businesses — face difficulties banking.
Large amounts of cash sloshing around the cannabis sector makes pot
companies the target of robberies and other crimes, lobbyists in favor
of the SAFE Act have said.
Up until recently, McConnell appeared to be a major roadblock to the
Senate taking up the bill, and has said in the past that marijuana is
hemp’s “illicit cousin, which I choose not to embrace.” The hemp
industry holds a significant amount of power in Kentucky, McConnell’s
home state, and a new provision in the SAFE Act grants specific
protections to hemp farmers.
Crapo, an influential Republican senator from Idaho,
told Politico in September
that he wanted to hold a Senate Banking Committee vote on a cannabis
banking bill. Progressive groups such as the American Civil Liberties
Union, the Center for American Progress and others have criticized top
House Democrats for moving forward with a bill that doesn’t address
social-justice issues tied to decades of cannabis prohibition.
ETFMG Alternative Harvest ETF
MJ, -0.95%
, which tracks a basket of cannabis stocks, has lost nearly half its
value in the past 12 months, while the broad S&P 500 index
SPX, +0.91% has gained 1.6%.
https://www.marketwatch.com/story/mitch-mcconnell-travels-to-california-where-pot-execs-pitch-need-for-cannabis-banking-reform-2019-10-09?siteid=rss&rss=1
