• Cultivated
  • Posts
  • Is cannabis banking reform closer than ever? Maybe

Is cannabis banking reform closer than ever? Maybe

Plus, hemp vs weed, ESOPs, Gov. Hochul, and more

Good morning.

It was a busy day in the weed world and we’re here to help you unpack everything you need to know. 

A side note: The week before 4/20 probably isn’t the best time to get your products noticed. We’re deluged. (That is, unless your product is a scoop on rescheduling). 

Let’s get to it. 

- Jeremy Berke & Jay Rosenthal

Today’s newsletter is 1525 words, or about a 5 minute read. 

💡What’s the big deal?

Is cannabis banking reform closer than ever? Maybe…

Driving the news: The cannabis industry has less-than-patiently waited for Congress to pass some version of the Secure and Fair Enforcement Regulation Act (SAFER Banking), a narrow bill that would let cannabis companies access the banking system like any other industry for years.

The bill was first introduced in 2017, and is yet to become law though it’s gotten kinda-sorta close. Lawmakers have attempted to pass it on its own and as part of broader defense bills, but to no avail.

It’s passed the House seven times by our count, though it’s floundered in the Senate. It passed the powerful Senate Banking Committee last year, but has yet to receive a full floor vote. 

What happened: Senate Banking Committee Chairman Sherrod Brown said on Tuesday that he’s open to advancing stablecoin legislation — a type of cryptocurrency pegged to a normal fiat currency like the US dollar or even a commodity — with the SAFER Banking Act, Bloomberg reported.

The bundled legislation could be attached to the must-pass Federal Aviation Administration spending bill. We’ll believe it when we see it. 

Yes, but: Republican Senator Rand Paul told The Dales Report Podcast on Tuesday that it’s “unlikely” Speaker Mike Johnson’s Republican-majority House will hold a standalone vote on the SAFER Banking Act, given Johnson’s challenges with the far-right.

“And so, I think if I were in the speaker’s shoes, would I say, ‘Wow, do I need another headache?’” Paul said. “I think the logistics of it are real difficult right now.”

On the other hand: In contrast to Paul’s perspective, former Colorado Rep. Ed Perlmutter, a Democrat who spearheaded the SAFER Act while in office and is now lobbying for it, said at the Benzinga Cannabis Capital Conference in Florida on Tuesday that cannabis banking reform is “closer than ever.” 


Why it matters: Well, the benefits of the SAFER Banking Act are obvious and immense for the industry. 

For one, it would move the industry into the 21st century by getting rid of cash-heavy transactions. And second, it would go a long way toward normalizing the industry in both Main Street and Wall Street’s eyes, giving ailing pot stocks a much-needed boost.

Still, some cannabis advocates aren’t supportive of the SAFER Act. They say that the reform is too incremental and shouldn’t be passed ahead of broader social justice considerations, like federal decriminalization or even more expungements. 

And, because cannabis would remain illegal, it’s not exactly clear how far the legislation would go. 

It would allow cannabis companies to open checking accounts and get loans on more favorable terms — meaning the industry’s cost of capital would come down to normal levels — but it’s not clear as to whether the legislation would open up capital markets more broadly for the industry.

Custody issues and the other nuts-and-bolts of high finance may still be unavailable to cannabis companies doing business in the US, even if the SAFER Act passes. Big investment banks, and not to mention major US exchanges like the Nasdaq, may still wait for full-fledged federal reform. 

What’s next: FAA funding expires on May 10. There will be a lot of politicking back-and-forth over attaching crypto and cannabis-related legislation to a must-pass bill. 

Hate to say this, but we’ll know when we know. 


🗣️ Quotable

“They have plagued our neighborhoods flagrantly violating our laws, selling to kids, evading taxes, and even offering products laced with unregulated chemicals. They needed to be shut down,” New York Gov. Kathy Hochul said during her 2025 budget speech about the hundreds of illicit cannabis shops that have popped up all over the state.

The state included elements of the Smokeout Act which gives local and state authorities the power to padlock offenders for up to a year — while “due process plays out,” Hochul said. 

“They won't disappear overnight, but eventually New Yorkers will see the change they've been waiting for in their communities. This will clear the way for the Black, Latino, women, immigrant, veteran and justice involved business owners who run the legal shops — the people our cannabis laws were intended to empower,” she added. 

A brewing battle between the hemp and regular cannabis

What happened: Illinois’ Cannabis Business Association is calling on the state to crack down on hemp-derived THC, known in the industry as Delta-8. 

They’re joined by state lawmakers, who support banning Delta-8. It sets up an interesting fight between traditional licensed cannabis retailers and mostly illicit sellers who are taking advantage of the market. 

Give me the context: Federal and state lawmakers want to rein in the hemp industry.

Some companies have taken advantage of a loophole created by the 2018 Farm Bill, which legalized hemp production, defined as less than 0.3% THC, in the US. 

These companies are using a chemical process to synthesize Delta-8 THC, which differs from regular Delta-9 THC, to sell loosely-regulated, intoxicating products in all 50 states. The effects on the consumer, however, are similar. 

In March, 20 state attorneys-general urged Congress to crack down on these Delta-8 products

What they’re saying: “It is deeply disheartening and, frankly, a betrayal by the state to allow these shops to pop up and call themselves dispensaries,” Ron Miller, a dispensary owner, told a local news outlet

And more: The hemp versus weed battle is showing up in the courts, too. 

California cannabis firm Stiiizy is being sued in Illinois and Missouri, over claims that its products contain far more than the allowable 0.3% THC. 


🥊 Quick hits

The Canadian government won’t include excise tax relief for cannabis retailers in next year’s budget, despite what many online prognosticators have suggested.  

Democratic legislators in Virginia said they don’t expect to see legalization in the state until at least 2027, after Republican Gov. Glenn Youngkin leaves office. Youngkin vetoed the legislation, passed by the state legislature, last month. Lawmakers don’t expect they’ll have enough votes to override the veto. 

Florida’s Smart & Safe initiative to legalize cannabis in the state is recruiting US military veterans to build support through a broad media campaign. Polls show that legalization has majority support, but may still be under the 60% threshold needed to pass

A new study published in the journal Medical Cannabis and Cannabinoids observed “significant improvement” in the quality-of-life for medical cannabis patients observed over one month. 

📈 Deals, launches, partnerships

The week leading up to 4/20 is always busy with announcements and product launches. We’ll do our best to pick out what you need to know:


Canna Provisions, a Massachusetts dispensary, has switched its business structure to become employee-owned in a transaction led by MBO Ventures. Employee-owned cannabis companies, or ESOPs, are able to reduce their tax burdens as they don’t need to pay federal or state income taxes — meaning, they don’t get hit with the 280E tax

Key Investment Partners, a cannabis-focused firm, announced the first close of its second flagship fund. The firm is also expanding its advisory board to include David Culver, formerly of Canopy Growth and now senior vice president of the US Cannabis Council, and Eula Adams, a former partner at Deloitte. 

Cannabis fintech Green Check Verified is partnering with Payment Alliance International, partly owned by Brink’s, to bring ATMs to cannabis dispensaries across the country. 


Women-owned edibles brand Grön is launching in New York just in time for 4/20. Products will be available at select dispensaries across the state. 

California cannabis beverage company Uncle Arnie’s is launching in Illinois, in partnership with Green Thumb Industries, CEO Theo Terris said on LinkedIn

The Cannabist Company is launching Triple Seven, what it calls its premium, high-potency flower brand, in the New York and Florida markets. 

Right On Brands, a hemp company, is launching its line of Honey products, which contain THC-A and are Farm Bill-compliant, in Texas, the company said

🕺 People moves

Wana Brands cofounder Nancy Whiteman is set to step down from the top job at the Colorado edibles brand at the end of May, to focus on her board duties at Canopy USA. She’ll be replaced by Joe Hodas, Wana’s chief marketing officer. 

The Hemp Beverage Alliance, an industry trade group, announced its inaugural board of directors yesterday, including David Knight, the president and COO of Jones Soda, and Adam Terry, the CEO of CanTrip, among other notable execs.

📰 What we’re reading

What did you think of today's Cultivated Daily?

Login or Subscribe to participate in polls.