Shares of cannabis stocks drifted Tuesday after the House voted 321 to 101 in favor of a bill that will protect banks that do business with companies in states that have legalized marijuana for medicinal or recreational purposes from federal enforcement action.
Shares of Aphria (APHA) – Get Aphria Inc Report, Canopy Growth (CGC) – Get Canopy Growth Corporation Report, Cronos Group (CRON) – Get Cronos Group Inc Report and Tilray (TLRY) – Get Tilray, Inc. Report were all trading mixed to slightly higher on Tuesday after the House passed the so-called SAFE, or Secure and Fair Enforcement, Banking Act, which aims to open up the federally insured banking system to cannabis companies.
The passage of the bill, which also aligns with 420 day – the not-so-secret tongue-in-cheek number that implies weed-friendliness but also marks April 20 as the “pot high holiday” – would exempt cannabis business transactions from being considered proceeds from illegal activity and subject to anti-money-laundering laws.
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It would also prohibit banking regulators from asking banks to terminate a customer account unless there was a valid reason aside from reputation risk. The bill last passed the House in 2019, but did not make it through the then-Republican controlled Senate.
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The cannabis space already has been smoking in 2021, thanks in part to consolidation in the industry as well as expectations that the drop in demand for both marijuana itself and marijuana-infused products may be starting to pick up again after a pandemic-induced lull.
Expectations that a more “green” friendly Biden administration also may lead to federal legalization of marijuana has driven renewed interest in the broader cannabis sector, particularly on the retail side, where consumers have shown renewed interest in marijuana and CBD-infused food and beverage and medicinal products.
States including New York and New Mexico are already moving forward with plans to legalize adult-use marijuana.
Ahead of 420, shares of the benchmark ETFMG Alternative Harvest ETF (MJ) – Get Report were rising 2.91% to $21.60. At last check, shares of Aphria were down 0.35% at $14.34, while shares of Canopy Growth were up 0.18% at $27.51. Cronos Group shares were down 0.24% at $8.18, while Tilray shares were up 0.63% at $17.55.
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