Cannabis Stocks Spiking on Hopes for Banking Bill

Cannabis stocks spiked on the news that a banking bill will be introduced in Congress this week. The bill would allow financial institutions to provide services to cannabis companies and could help legitimize the industry.

Cannabis stocks are spiking on the hopes of a banking bill that would make cannabis legal. Read more in detail here: safe banking act 2021.

The cannabis business in the United States is poised to score its greatest victory of the year in 2021.

It seems like significant cannabis legislation will be approved in the next weeks — and if it does, it will likely lay the scene for a massive cannabis stock surge until the end of the year.

The Secure and Fair Enforcement (SAFE) Act, often known as the Safe Act, is the law in issue. The Safe Act is one of the most popular cannabis legislation, with Democrats and Republicans both supporting it.

By allowing banks to provide financial services to the cannabis business without fear of federal punishment, the Safe Act would be a significant growth driver for the U.S. cannabis industry.

Most cannabis shops in the United States, for example, are compelled to operate in cash due to a lack of credit card services from megabanks like Bank of America (BAC) and JP Morgan (JPM). This and other issues are addressed by the Safe Act.

The Safe Act seemed to have little chance of passing in 2021 throughout the most of the year. Despite the fact that the measure was approved by the House in April of 2021, it never made it to the Senate floor for a vote.

Cannabis Legislation Takes a Turn for the Better

However, the Safe Act’s prospects recently took an unexpected turn thanks to a daring action by one of the country’s most pro-cannabis governors. From Marijuana Moment, here are a few additional information.

Rep. Ed Perlmutter (D-CO) and a bipartisan group of cosponsors won a floor vote on adding language to the National Defense Authorization Act (NDAA) that would prohibit financial authorities from punishing banks or credit unions that cooperate with state-legal marijuana companies. The congressman is a co-sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, which has passed the House four times in different versions and is similar to the current amendment.

Despite the fact that the measure has nothing to do with defense, it’s probable that Perlmutter views the must-pass NDAA as a vehicle for change that might clear the Senate, while all other House-passed cannabis banking legislation has stalled to yet.

Attaching the Safe Act to a military measure is unusual, as this paragraph points out. However, this may be the twist that allows the law to pass. Senators are unlikely to oppose a large military package if it included popular cannabis legalization.

The measure is expected to be voted on in the Senate in the next weeks, and if approved, it would be a significant driver for U.S. and worldwide cannabis companies since it:

  • Allows the cannabis sector in the United States to use basic banking services.
  • Starts the process of legalizing.
  • It gives investors hope that additional cannabis legislation may pass.

Cannabis stocks are now on sale.

Cannabis stocks soared when news broke that the Safe Act was being bundled into a military bill. In the long term, though, cannabis stocks in the United States are down significantly this year.

From its 52-week high, the Advisorshares U.S. Cannabis Stock ETF (MSOS) is down 45 percent. Take a look at the chart below for a 12-month period.

Cannabis-Stocks-Spiking-on-Hopes-for-Banking-Bill

What Can We Expect in the Future?

Looking forward, this seems to be a fantastic arrangement.

Cannabis stocks in the United States are down significantly from their 52-week highs, and the sector is on the verge of a big catalyst.

We believe our member-only portfolio is well positioned to ride the expected uptick. Start your free 2-week trial of CST now to view our portfolio holdings and get trade alerts and analysis.


Author Bio & Cannabis Stock Trading

Michael Vodicka is a stock analyst with over 20 years of trading and investment expertise. His work has been published in some of the industry’s most prestigious journals. Since 2013, he has been investing and guiding investors in the cannabis industry.

Michael Vodicka

Members of Cannabis Stock Trades benefit from Mr. Vodicka’s knowledge and advice.

Join Cannabis Stock Trades for unique research, trade alerts, and a model portfolio from Mr. Vodicka.

The safe banking act summary is a bill that would allow banks to work with the cannabis industry. As a result, many people are buying stocks in anticipation of it passing.

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