New bipartisan bill would allow cannabis stocks to access financial services and list on NYSE, NASDAQ

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representing Troy A. Carter (D-LA) and Rep. Guy Reschenthaler (R-PA) presented a new bill on Thursday aims to provide many benefits to the difficult cannabis industry.

Among the most important provisions of Marijuana Business Capital Loans and Investments Act (CLIMB)is the one that would allow listing on national stock exchanges, such as the New York Stock Exchange and NASDAQ, according to Forbes.

The news came on the heels of the Senate’s rejection of the Safe and Fair Banking (SAFE) Act for the sixth time. The SAFE Banking Act is intended to protect financial institutions that wish to provide their services to legal marijuana businesses.

Currently, marijuana operators are not permitted to list on national stock exchanges because cannabis is still a Schedule 1 drug and as such federally illegal. This is also the main reason why cannabis companies have had difficulty accessing capital, as large financial institutions will not provide their services to them.

“Cannabis companies have historically struggled to access capital, and the NYSE and Nasdaq will not list cannabis companies with operations in the United States, as such operations continue to be federally illegal,” Sander Zagzebsky, corporate and securities lawyer at Clark Hill and co-chairman of its international cannabis practice group, said. “Because cannabis companies cannot list on US exchanges, they typically list on the Canadian Securities Exchange and trade only on OTC markets in the United States, if at all, which significantly limits institutional support and contributes to increased volatility.”

The CLIMB Act was introduced “to enable access to community development, small business, minority development, and any other source of public or private financial capital for the investment and financing of legitimate cannabis-related businesses” . The bill begins by providing a safe harbor for this activity.

American dream

“The bipartisan CLIMB Act is a huge opportunity to bring fairness and equal opportunity to our nation’s burgeoning cannabis industry,” Carter said in a press release. “From my work on the Small Business Committee and working directly with minority and veteran-owned small cannabis businesses, 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 become leaders in business – and that’s what it’s all about. the American dream,” he said. .

Reschenthaler added, “This bipartisan legislation will stimulate the economy, create jobs and level the playing field for American businesses.”

Perfect timing

As Zagzebski pointed out, the timing of The Climb Act couldn’t be more perfect, with cannabis stocks down.

“Publicly-listed cannabis companies are trading at or near historic lows,” Zagzebski said. “Thus, the CLIMB Act, if passed, could be a welcome boost for the entire industry, as it would provide access to U.S. stock exchanges for eligible companies, significantly increase liquidity for institutional investors, and likely give dynamism in the market. the entire industry, even the smallest operators.

Photo: Benzinga; Source: Pixabay

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