- On Wednesday the US House of Representatives passed the Secure and Fair Enforcement Act, which is designed to protect banks working with cannabis companies.
- Pot stocks spiked at the open on Thursday after the vote before paring gains.
- The act will still have to pass Senate before it becomes a law.
- Read more on Business Insider.
Pot stocks surged at the open of trading on Thursday after the House of Representatives passed the Secure and Fair Enforcement Act the prior day. Most major companies erased gains in early trading after the initial surge.
The passage of the so-called SAFE Act is a major step forward for the cannabis industry. It gives protections to banks working with the cannabis industry. Currently, banks face legal issues because while cannabis is legal in some states, it is not legal on a federal level.
„Although the bill still needs to pass the Senate, SAFE Banking’s victory in the House is monumental,” Charlie Wilson, chief revenue officer at Green Bits told Markets Insider in an email.
It represents a critical step forward for the industry, he said. „By allowing cannabis businesses to access financial services, the SAFE Banking Act will create a safer, more transparent, and more efficient marketplace.”
Here’s how much major pot stocks gained early Thursday:
- Aurora Cannabis: up as much as 3.4%, trading 1.3% lower as of 10:15 a.m. ET
- Canopy Growth: up as much as 2.9%, now trading 1.2% lower
- Tilray: up as much as 2.4%, now trading 1.1% lower
- Aphria: up as much as 3.2%, now trading 0.4% lower
- Cronos: up as much as 4.2%, now trading 2% lower
The SAFE Act was written by Democratic Rep. Ed Perlmutter of Colorado. After the vote in the House, it goes next to the Senate, where it faces more opposition from Republicans on its road to becoming law.
Still, at a key senate hearing on cannabis banking reform in July, the Republican chair of the Senate Banking Committee, Sen. Mike Crapo of Idaho, gave no indication that the SAFE Act was in jeopardy.