On Sept. 27, a U.S. Senate Committee voted to advance the Secure and Fair Enforcement Regulation Banking Act, nicknamed the “Safer Banking Act,” to the Senate floor. This bill would grant the U.S. cannabis industry easier access to capital, banking services and payment methods.

Although many banks already offer services to cannabis businesses, if the Safer Banking Act becomes law, these privileges will extend to the full slate of cannabis businesses across the United States.

For the U.S. government and cannabis companies, passing this bill could be a powerful step towards reclassifying marijuana from its current Schedule 1 controlled substance status, to Schedule 3.

Schedule 3 is defined as drugs with a moderate to low potential for physical and psychological dependence. A Schedule 3 classification could provide tax relief to cannabis businesses by allowing them to claim tax deductions or credits, which are currently outlawed for Schedule 1 controlled substances.

Cannabis market’s consumer impact

From a consumer perspective, the Safer Banking Act could trigger more legislation down the road. This would ensure safe and unrestricted access to legal cannabis for all Americans 21 and older, like the regulations governing alcohol.

In effect, legal cannabis could end the incarceration of individuals for non-violent marijuana offenses; an issue that has disproportionately plagued low-income U.S. communities for decades. If passed by the Senate, and then Congress, the Bill will proceed to President Biden’s desk for final approval.

So how has the cannabis industry responded to the Safer Banking Act? Shares of cannabis firms, such as Cronos Group (TSX:CRON), OrganiGram Holdings (TSX:OGI) and Canopy Growth (TSX:WEED), spiked immediately after the Committee’s vote, only to later reverse course and close lower.

While cannabis stock volatility is expected as the bill continues its legislative journey, shares are expected to spike if it passes the Senate. This kind of turbulent market activity is common anytime legislation confronts rigid regulations.

Cannabis stocks to watch

For investors, while this isn’t financial advice, here are a few strong cannabis stocks to keep your eye on, all of which have risen more than 50 per cent at some point over the past 6 months:

And now that you’ve been caught up on what to expect across the Cannabis market, be sure to check out the Cannabis Bullboards on Stockhouse.com and the Weekly Cannabis Report newsletter.

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