🏛️ US cannabis industry descends on DC

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🏛️ The US cannabis industry descends on DC

Driving the news: The U.S. cannabis industry has… a lot … of legislative priorities. But lately, there’s at least an attempt to channel it all in one direction under the US Cannabis Roundtable.

The trade group descended on Capitol Hill this week, meeting with 25 lawmakers from both parties.

The big takeaway? There’s a real push behind the CLIMB Act, recently reintroduced by Reps. Guy Reschenthaler (R-PA) and Troy Carter (D-LA). (And Carter held his own “crawfish and cannabis” event with some industry notables — where was our invite?)

Zoom in: While the path forward isn’t yet clear, and may not be until after the midterms shake things up, the bill would essentially normalize how cannabis companies interact with the broader financial system, and could even pave the way for U.S. companies to list on major domestic exchanges like the Nasdaq and NYSE. 

That would be a massive liquidity boost for companies that have recently relied on debt and distressed M&A to fuel growth. It would also open the industry up to vast swaths of institutional and retail investors, providing real fuel for growth, and a real story about momentum that cannabis has sorely lacked over the last few decades.

And the lobbying day wasn’t without its celebrities. Stacey Rusch, a Real Housewife and founder of SHAYO, a cannabis brand attended as well.

What they’re saying: “The CLIMB Act will help unleash the full potential of the American cannabis industry,” said USCR CEO Saphira Galoob. 

“Right now, Canadian cannabis companies can ring the bell at U.S. stock markets and access American capital markets while domestic cannabis businesses are largely locked out of even the most basic financial services. That's not a level playing field.”

And: “This legislation represents a common-sense step toward aligning federal policy with the realities of today’s cannabis industry,” said Curaleaf CEO Boris Jordan. 

“For too long, U.S. operators have been constrained by outdated regulations that limit access to capital and prevent participation in major exchanges. Advancing the CLIMB Act would open the door to deeper institutional participation and oversight, while supporting the long-term stability and maturation of the sector.”

But, but, but: Cannabis, write large, is still a house divided. 

On one side, you have regulated, state-legal cannabis under the US Cannabis Roundtable. And on the other, you have all sorts of hemp and alcohol companies that want to develop a distinct set of rules that favors their businesses.

While certainly relaxed regulations toward cannabis can help both, often the hemp and cannabis lobbying priorities compete with each other. And a looming November ban of intoxicating hemp-derived THC has placed a real shot clock on the hemp side’s efforts.

To that end, hemp trade groups along with wine and liquor distributors like Total Wine & More, have hired powerhouse lobbying firms in recent days to press lawmakers to develop federal rules regulating hemp-THC drinks more like alcohol, Politico reports.

The Wine & Spirits Wholesalers of America even developed a website to help educate lawmakers and consumers on the issue. 

The final word: Don’t ask us to give you odds on whether the bill will pass. We can’t trade for you. But it is true that in the absence of any news on the rescheduling front, narrow, industry-focused reform like the CLIMB Act is probably the best shot we have at cannabis reform in the legislature for now.

And it would also be wise for hemp and cannabis to get their house in order. Both sides of the industry want to sell THC. The goal should be a regulatory framework around THC itself, that doesn’t distinguish.

-JB

"If you look at other really specialized industries, not every bank in the country participates in those industries,” said Shield Compliance CEO Tony Repanich during our very first episode of Banker on Call. 

“This industry is really complex when you consider the state by state differences, the differences between state and federal law that you have to contend with from a BSA/AML (Bank Secrecy Act/Anit-Money Laundering) perspective. And so maybe you don't want every bank in the country doing this, you want banks that actually know how to do this and understand the industry that they're serving.”

Watch the full episode: 

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