Wedbush Analysts Call Reintroduction Of SAFE Banking Positive News After Massive Letdown In December

A group of bipartisan lawmakers introduced a marijuana cannabis banking bill in Congress on Wednesday.

Previous attempts by lawmakers to enact to SAFE Banking Act failed, even though the bill passed through the House seven times, it never made it to the floor for a Senate vote. Under the proposed bill, financial institutions would be allowed to provide banking and financial services to legal cannabis businesses and provide industry workers access to mortgage loans, wording that had not been included in prior versions.

In reaction, numerous cannabis stocks traded higher on Thursday.

Wedbush’s analysts Gerald Pascarelli and Antoine Legault shared their views on the situation, noting that the reintroduction of SAFE is the most positive news since President Biden's October announcement that he would pardon all federal offenses of simple marijuana possession. That news was clearly well-received and gave cannabis stocks a much-needed bump.

“While we are encouraged by the reintroduction of the bill, the path forward will clearly come with its fair share of challenges. Aside from the now Republican-controlled House, the Senate has never taken SAFE to the floor for a vote, despite previously passing in the House seven times," the analysts said. "While recent commentary from Senate Banking Committee Chairman Sherrod Brown (D-OH) has been favorable, even if Senate Banking passes the bill, there is no assurance the Senate has the support, or if Chuck Schumer (D-NY) will bring the bill to the floor for a vote. Outside the Senate, the House would be the bigger and more obvious hurdle given that it is now Republican-controlled. In any event, the fact that we are talking about SAFE Banking this early in the year after the massive letdown in late December should be viewed as a positive.”

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