State-owned marijuana companies will be able to be listed on national stock exchanges and have access to key financial services under a bipartisan congressional bill introduced Thursday.
The Capital Loans and Investments Act for the marijuana business (CLIMB) is sponsored by representatives Troy Carter (D-LA) and Guy Reshenthaler (R-PA).
While the main purpose of the legislation is to free up the cannabis industry’s access to financial loans and investment opportunities, in part by providing protection for private financial institutions and government agencies that provide such services in traditional markets, one section stands out as particularly new. .
It would provide a safe haven for national stock exchanges and market participants that “have registered, listed or intend to list, or authorize trading or facilitate the offering, listing or trading on a national stock exchange of cannabis-related securities. business or service provider. “
This is a verbose way of saying that cannabis companies will be allowed to list on major stock exchanges such as the Nasdaq and the New York Stock Exchange (NYSE). That would be a boon to a thriving industry, legitimizing their presence on Wall Street.
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More broadly, the bill states that no federal agency will be allowed to penalize a business or government body for “receiving funding, appropriations, grants, contracts, or other forms of monetary or non-monetary assistance from a government body or marketing, offering or selling any security, banking, insurance or other financial services product ‘only because the business or individual’ provides business assistance to a legitimate business or cannabis-related service provider ‘.
For example, the bill would theoretically protect an agency such as the Federal Small Business Administration (SBA) from sanctioning another agency (eg, the Department of Justice) for providing its services to legitimate cannabis companies. However, it does not contain a language that actually obliges the SBA to start providing such services to the industry.
Due to the federal ban, state-owned legal cannabis operators do not have equal access to traditional lending and financing options like companies outside the United States, which creates significant barriers to entry.
The CLIMB law will change that. Full version ⤵️ https://t.co/NdCo9nSoeu
– Congressman Troy A. Carter (@RepTroyCarter) June 23, 2022
“The CLIMB bipartisan law is a huge opportunity to bring justice and equal opportunities to our nation’s thriving cannabis industry,” Carter said in a press release. “From my work on the Small Business Committee and from working directly with small, minority and veteran cannabis companies, it is clear that access to capital remains one of the biggest barriers to entry and success in the industry.
“By bringing symmetry to the business ecosystem with the CLIMB Act, we can help communities that have long been harmed by the criminalization of marijuana move into business leaders – and this is the American dream,” he said. .
Reschentaler stressed that “American cannabis companies are currently limited to receiving traditional loans and financing, which makes it difficult to compete with larger global competitors.”
“The CLIMB law will eliminate these barriers to entry and provide state-owned U.S. legal cannabis companies, including small, minority and veteran businesses, with access to the financial instruments needed to succeed,” the congressman said. “This bipartisan legislation will stimulate the economy, create jobs and level the playing field for American business.
This legislation uses a targeted approach to cannabis reform in the financial and regulatory sectors, while another bipartisan bill advocated by advocates and stakeholders – the Safe and Fair Implementation Act (SAFE) on banking – would more widely protect financial institutions working with the marijuana business by sanctioning by federal regulators.
With regard to SAFE Banking, however, news emerged Thursday that a possible tool for reform may have hit a dead end, with congressional leaders agreeing not to preserve the language of cannabis in a large-scale production bill called the Competition Act of America .
“CLIMB offers mandatory financial access to women and minority entrepreneurs in cannabis,” Women Grow President Gia Moron said in a press release issued by Carter’s office. “While SAFE Banking is a security port for cash deposits, this is only a critical role in business banking. Women and minority cannabis companies continue to face a lack of access to loans, grants and investment opportunities.
Aaron Smith, chief executive of the National Cannabis Industry Association, added that the new legislation is “a much-needed reform that will help level the playing field for the country’s main cannabis business.”
But Justin Strekal, founder of Better Organizing to Win Legalization, criticized the lack of provisions in the bill requiring federal agencies such as the SBA to stop discriminating against the cannabis business.
“I am deeply concerned about the lack of specificity regarding the protection and directives that would allow small businesses access to capital in this bill,” he told Marijuana Moment.
(Disclosure: Strekal supports Marijuana Moment’s work through Patreon’s monthly promise.)
“By allowing Wall Street to invest millions, possibly even billions of dollars in their well-connected friends who are just entering the cannabis industry, the CLIMB Act could inadvertently be a catalyst for further consolidation in this emerging market. “, he said. “This would be in stark contrast to everything that activists and defenders have fought for for decades.
Read the text of the CLIMB Act below:
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