Cannabis Musings - December 13, 2024
SAFE(+R) Banking is the gift that keeps on giving.
Friends – we’re lucky to have a lot of new readers of these Cannabis Musings, so I thought I’d take the moment to welcome you all and introduce you to one of our many recurring topics – the SAFE(+R) Banking Act, or, well, the lack thereof. Indeed, the recurring failure of cannabis banking reform has been one of our favorite topics of conversation since the early days of this newsletter (around six years ago), providing us with deep comedy relief. It’s like rooting for the Washington Generals – you think “maybe this will finally be the game where they beat the Harlem Globetrotters,” but knowing deep down that it’s not, and at least it’ll be funny to watch. (Yes, I’m aware that the Generals have beaten the Globetrotters, but that hasn’t happened since 1971, so please don’t email me.)
We even set up a bet on Manifold Markets earlier this year asking whether SAFER would pass by January 1, 2025. A whopping 52 trades have been placed, with YES standing today at 9%. The power of predictive markets!
So, imagine my giddiness when I saw some SAFER Banking news hit the wires on Tuesday. Maybe this was the moment! Maybe the Generals would finally achieve glory! And yet, once again, it’s oyfen himmel a yarid (“much ado about nothing”). Meadowlark Lemon pulled down the ref’s shorts and made a half-court shot, backwards.
Republican Senators have once again blocked an attempt to introduce SAFER Banking into year-end spending bills. Why? Because it’s cannabis. That may sound flippant, but we need to be reminded periodically that Congress isn’t going to spend its political capital to make things easy for this industry unless it absolutely has to. Disappointing for sure, but not at all surprising.
As an observer of the cannabis banking reform saga over the past years, I’ve noticed that people tend to blame one party or another for its failure, and who gets the blame tends to be correlated to the political leanings of the blamer. We here at Cannabis Musings try to remain politically neutral, but for this, I’ll say that there’s plenty of blame to go around. The Democrats have tried to add social equity-type of provisions to the bill over the years. The Republicans have tried to use it to scale bank prior “debanking” rules (regulations that allow banks to drop ‘riskier’ customers) that apply to other industries, and a political cudgel to shame the Democrats. Both sides are subject to the reality that any bill really needs at least 60 Senators for success, to get past the filibuster. So, don’t be so quick to blame one side without thinking about the broader picture.
Unless you’re active on social media, where this topic is discussed breathlessly, you may not have even noticed this news. To me, that’s a healthy sign that the industry has matured and is more realistic about the actual potential for federal cannabis reform currently. It’s also reflective of the fact that banking reform, at least as is offered by the SAFER Banking Act, simply isn’t as necessary as it was when the bill was first submitted in 2019. Would it help? Of course, but there’s so much more access to banking treasury services and insurance than there was in the mid-2010’s, that it’s more a question of cost rather than availability. That’s why I still believe that, if we’re going to spend time and money on federal reform, it should be an all-out push for full legalization, to make it worth Congress’ and our effort.
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© 2024 Marc Hauser. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín.