Some Optimistic About Cannabis Banking Legislation's Odds in Lame Duck

Source: S&P Global Market Intelligence

Senate Majority Leader Chuck Schumer, D-N.Y., has said prospects are bright for cannabis banking legislation to be taken before the end of the year, but analysts are somewhat less sure the measure will be passed during the lame duck session of Congress.

"We are getting very close" to an agreement, Schumer said during an election debate. "We may be able to get something done rather soon. I'm working with a bunch of Republican senators, a bunch of Democratic senators, to get something passed."

Schumer said the compromise would add "justice" to the Secure and Fair Enforcement Banking Act, or SAFE Banking Act, which would permit banks to lend to cannabis companies. One addition would be the ability to expunge some people's records of marijuana possession, he said.

BTIG analyst Isaac Boltansky in a research note said he was "optimistic" about the bill passing during the lame duck session even as decriminalization of marijuana at the federal level remains "years away."

Compass Point LLC analyst Ed Groshans, however, pegged the odds of the SAFE Banking Act passing before the end of the year at less than 35%. An omnibus spending bill is "the only viable legislation" that the cannabis legislation could be amended to, he said in a research note. The bill needs the support of Senate Minority Leader Mitch McConnell, R-Ky., who has expressed a negative view on marijuana, and would need nine Senate Republicans to overcome the filibuster, Groshans said.