Odds Drop for Cannabis Banking Bill in 2022

Source: S&P Global Market Intelligence

The chances of cannabis banking legislation passing this year have dimmed after the measure was excluded from the must-pass National Defense Authorization Act, financial analysts said.

Staunch opposition on the floor from Senate Minority Leader Mitch McConnell, R-Ky., led to the exclusion of the Secure and Fair Enforcement, or SAFE, Banking Act from the NDAA, according to notes from both Ian Katz, managing partner of Capital Alpha Partners LLC, and Ed Groshans, analyst at Compass Point Research & Trading.

The SAFE Banking Act, which has been passed by the House multiple times, would allow banks to lend to cannabis companies. Senate Majority Leader Chuck Schumer, D-N.Y., has been working on a compromise, dubbed SAFE+, to be included, but it failed following Republican pushback.

Groshans said Compass Point has dropped its odds of SAFE+ becoming law in 2022 to less than 25%, with its last chance being its possible attachment to an omnibus spending bill.

"We will only adjust these odds, if McConnell makes public comments supporting SAFE+," the analyst said.

Katz said that attachment was a "longshot given the opposition from McConnell."