Cannabis Musings - May 11, 2023
Cannabis Musings - May 11, 2023
The Senate's SAFE Banking Act hearing - what's the deal with that?
Friends – I watched Thursday’s Senate Banking Committee hearing on the SAFE Banking Act (beta v.9) so you didn’t have to.
Long-time readers of these Cannabis Musings know that I’m very much a SAFE Banking Act skeptic. I wistfully recall an industry conference in 2018 at which a panel of CEOs from public MSOs and LPs was asked when they expected SAFE Banking to pass. They all anticipated passage within 12 months. And yet, here we are.
Congressional hearings tend to be pure Theater of the Absurd, and this one did not disappoint. Senator Steve Daines (R-MT) made it abundantly clear that he doesn’t want cannabis legalized, but he’s okay with banking – yet another example of the paradox in which this industry operates. Ademola Oyefeso, International Vice President and Director of Legislative and Political Action Department of the United Food and Commercial Workers International Union, and Cat Packer, Vice Chair of the Cannabis Regulators of Color Coalition, did the heavy lifting in presenting the case for regulatory relief, while Michelle Sullivan, Chief Risk & Compliance Officer for Dama Financial, a virtual bank servicing the cannabis industry, advocated for a narrower version of SAFE with tight regulatory constraints, unsurprisingly and understandably not wanting legislation that would threaten their business. Comic relief was provided unintentionally by Kevin Sabet, President and CEO, Smart Approaches to Marijuana, who manipulated facts and used the delightful term “Woodstock Weed” to further an anti-cannabis moral panic.
What’s the takeaway from this? Well, even the yutzes on #cannabis Twitter who insist there are 70+ votes for SAFE Banking in the Senate (but somehow could never quite actually name the 10+ Republicans who supposedly have publicly-declared their support) were noticeably quiet after the hearing.
Look, do I want SAFE Banking to pass? A year ago, I was a qualified “yes” because, at the time, I thought there was a slim chance for legalization and, if SAFE Banking were to pass, Congress wasn’t going to do anything further for the industry for years. Today, I’d say the industry should take whatever shmattes that Congress might give us (if anything) because legalization isn’t happening any time soon. Why? In my opinion, the cannabis moral panic offered up at today’s hearing is the mindset of those who actually bother to vote in primary elections. They don’t want cannabis, so why would a Senator expend any political capital to defy those voters?
The same calculus is why I’m also (still) highly skeptical that this iteration of the SAFE Banking Act is going to pass. The Federal government allows the industry to operate as a matter of grace, so why expend political capital on cannabis banking when there are so many major governmental priorities facing Congress.
I hope I’m wrong.
Finally, in case you missed the excellent panel on cannabis interstate commerce that I was honored to moderate, you can watch the replay here.
Be seeing you!
Hauser Advisory provides advice and strategy on business lifecycle events and cannabis industry navigation, tapping into a deep, national network and twenty-five years of dealmaking and capital markets experience.
© 2023 Marc Hauser and Hauser Advisory. 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. Subscribe to Cannabis Musings here.