According to Zuanic & Associates’ latest report, the SAFE Banking Act’s success in the US cannabis industry depends on factors such as rescheduling, US exchange uplisting, and the possibility of a “Cole Memo II” (Garland Memo). These catalysts are deemed more critical than the SAFE Act itself.
On The Cole Memo II
- The Cole Memo, introduced in 2013, provided guidelines for federal marijuana prosecutions in states where marijuana was legalized. It was rescinded in 2018, giving more discretion to federal prosecutors in marijuana-related cases.
- Attorney General Merrick Garland’s stance aligns with a hands-off approach, indicating a potential return to the principles of the Cole Memo. This aligns with the trend of state-level cannabis legalization.
Road Steps And Catalysts Ahead
Zuanic’s report suggests that delays in the mark-up vote for the SAFE Act may indicate positive developments. The bipartisan bill, filed in both the House and Senate in 2023, is gaining support, and the delays might be aimed at securing more votes.
The report outlines key steps and potential catalysts for the progress of the SAFE Act:
- Senate Banking Committee mark-up vote scheduled for late September.
- Evaluation of how 11 Republicans in the Senate Banking Committee might vote.
- Anticipation of changes or additions to the final bill before the mark-up vote.
- Senate floor vote scheduled for November, with potential amendments.
- Senate Majority Leader Chuck Schumer’s role in bringing the bill to a vote.
- Potential paths for passage if the Senate approves.
“If the SAFE Act passes the Senate, there are two potential paths: a prolonged process until mid-2024 with House debates and votes, or a quicker passage through inclusion in a must-pass year-end bill. However, the chances of passage in the GOP-controlled House without overwhelming Senate support are low. Passage via the Omnibus or NDAA might offer a faster route,” wrote Zuanic.
Low 60s In The Senate
The report explores various scenarios and analyzes the crucial role of Senate Republicans in securing the necessary 60th vote for the SAFE Act. It also discusses the likelihood of receiving support from Republican senators.
The report acknowledges the potential risks of including last-minute social equity additions or floor amendments in the Senate, which could influence Republican support for the bill.
Tallying SAFE Supporters: A Congressional Headcount
As of September 18, 2023, the SAFE Banking Act has 71 sponsors in the House (HR 2891: SAFE Banking Act of 2023), including 52 Democrats and 19 Republicans.
Notably, Representative David Joyce (R-OH) is the Primary Sponsor among Republicans.
In the US Senate, there are 34 Senate Democrats and Independents (31+3), along with eight Republican co-sponsors. The lead sponsor is Steve Daines (MT).
The other Republican co-sponsors are Bill Cassidy (LA), Kevin Cramer (ND), Susan Collins (ME), Cynthia Lummis (WY), Lisa Murkowski (AK), Rand Paul (KY), and Dan Sullivan (AK).
To achieve the required 60 votes in the Senate, the report goes through a process of elimination. According to Z&A, while some optimism exists, it is challenging to believe claims that the SAFE Banking Act could secure over 70 votes in the Senate. The most likely scenario is that it barely reaches 60 votes or falls short.
The report estimates a 50-60% chance of success in the Senate and slightly better odds of passing via a must-pass bill in the House at year-end. However, if pursued as a standalone bill in the House the following year, the chances drop to less than 40%.
Don’t miss your opportunity to connect with Pablo Zuanic, chief analyst at Zuanic & Associates, at the Benzinga Cannabis Capital Conference in Chicago on September 27-28. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.