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Prohibitionists are holding strong in DC

Plus, real world reasons why SAFE Banking is essential

Good morning.

Here’s your weekly reminder that there are folks in Washington that will try to stand in the way of any and all cannabis reform — and they will certainly have their voices heard on banking, rescheduling, and other cannabis reform measures too.

But it’s also important to remember that a huge majority of voters are on cannabis reform’s side.

With that, let’s get to it.

- Jeremy Berke & Jay Rosenthal

💡What’s the big deal?

House Republican Policy Committee provide anti-cannabis ammo to House members

What’s happening: We’ve written extensively about the march toward cannabis reform at the federal level, including this from yesterday’s Cultivated Daily: “While cannabis reform is always on the front burner for the cannabis industry, cannabis reform has (finally) taken a front burner in the nation’s capital.” 

But this reform march is not without its detractors.

The House Republican Policy Committee is urging members to oppose reform measures likely to come up for a vote this Congress, as reported by Marijuana Moment

Who said it? Here’s how the Republican Policy Committee describes itself: “The RPC serves as an advisory committee to House Republicans and provides a forum for Republican Members to discuss legislative proposals and current topics before the House. The committee produces issue backgrounders and conservative policy solutions to the House Republican Conference.” 

Why it matters: While cannabis is actively on the presidential campaign docket, rescheduling is actively being considered — and SAFER Banking is a legislative priority for the Senate Majority leader — opponents to reform are upping their policy game and raising their voices. 

While Republican House members are free to vote how they please, this is the second time in three weeks that serious, Republican policy people have voiced their opposition to reform measures under consideration in Washington. 

Recall this piece Weed Is Dangerous. Legalizing It Was a Mistake written by former Trump Attorney General Bill Barr and John Walters, a former member of the President George W. Bush’s cabinet as director of the Office of National Drug Control Policy. 

Will it matter? It’s unclear whether the Republican Policy Committee’s recommendations — or recommendations from other thought-leaders like Bill Barr and John Walters — will have an impact on hyper-political House members when 70% of voters support cannabis reform. 

We’d like to think this issue is gaining rather than losing steam, but nothing about the Washington decision-making process should surprise anyone in the cannabis industry. 


🥊 Quick hits

This Thursday, we could find out if Florida’s legalization measure will be in November’s ballot. We’ll keep our eyes peeled on this one as Florida is a big, giant, juicy market-in-waiting.

Paula Collins, A Democratic challenger to Republican Congresswoman and possible Trump running mate Elise Stefanik is putting cannabis front-and-center in her campaign. 

As Minnesota continues to aim for their cannabis retail roll-out sometime in 2025, dispensaries are planning to open on tribal lands this summer. 

Next door to Minnesota, voters in South Dakota may go back to the ballot (again!) for a never ending battle to legalize adult-use cannabis there.

Where the cannabis banking reform rubber meets the road

Driving the news: Banking reform is essential to the US cannabis industry, and a poll commissioned by the American Bankers Association shows that three in five voters feel the same way

Why it matters: If you’re reading this newsletter, you probably know why this matters for cannabis businesses in the US. Normalizing banking would be a huge lift to the industry and would (likely) free up capital for operators as more traditional banks get into the game. 

But there were two stories this week that underscore how screwed up things are. 

Story 1: A new bill in Delaware is being proposed that would, “ensure financial services provided to marijuana businesses are legal under state law.” When/if a banking reform measure passed Congress, states wouldn’t need to worry about businesses getting access to banks. 

Story 2: An employee of a cannabis company in Massachusetts was denied personal bankruptcy because his plan to repay his debt would be covered by his salary in a legal, Massachusetts cannabis company. Ideally, salaries generated from employment at a legal business would be fine to build into a bankruptcy restructuring plan, but here we are.

What’s next? When bankers, the White House, the Senate Majority Leader, and even many Republicans are on your side of the argument when it comes to cannabis banking reform — we’d like to think it’s possible to read the tea leaves. 

But like in the first story today, predicting what will happen in Washington is a tricky business.


📰 What we’re reading

📈 Earnings round-up

Canadian cannabis company Auxly reported their quarterly financials this week and revenue was up 7% year-over-year. Of note, Auxly’s strategic partner, tobacco company Imperial Brands, converted $123.4 million in debt to equity.

🤝🏻 Deals, launches, partnerships

Decibel Cannabis in Canada is selling their (very cool) Prairie Records stores to Canadian operator Fika.

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