US cannabis market gets major boost as SAFE Act is put in front of legislators once again
Health & Biotech
Health & Biotech
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The North American cannabis market received another shot in the arm this week, after legislation pertaining to the Secure and Fair Enforcement (SAFE) Banking Act was tabled in the House of Representatives once again.
If passed, the SAFE Act would create safe harbour for financial organisations such as insurance providers and banks, which would allow them to do business with cannabis companies.
This would be a huge step forward for the US cannabis industry, as most pot stocks — aside from ancillary cannabis companies that do not directly interact with the plant itself — are currently unable to access insurance, capital, or traditional banking services without violating federal law.
“At a time when small businesses need all the support they can get, and after cannabis businesses specifically have been providing essential services and generating significant tax revenues for states and the federal government with little to no financial relief, it is more imperative than ever to get the SAFE Banking Act passed into law,” National Cannabis Industry Association CEO Aaron Smith said.
“Lack of access to banking services continues to create serious unnecessary issues for public safety, transparency, and access to traditional lending that smaller operators desperately need.”
The bill was previously tabled in the house back in 2019, although it was defeated in a 321-103 vote by the Republican-controlled senate and subsequently failed to resurface during 2020, due to the disruptive influence of the COVID-19 pandemic.
However, pundits are convinced that the reintroduced legislation will soon become law, as the Democrats now command a slim majority in the upper and lower house.
The performance of the Australian Cannabis Index faltered once again this week, falling to -2.64 on the six-month performance chart, while the ‘Horizons Marijuana Life Sciences Index ETF’ (HMMJ) maintained its impressive 109% upward swing.
Conversely, Australia’s All Ordinaries and the S&P 500 continued to see mild gains, recording an increase of 14.95% and 17.88%, respectively.
The pharmaceutical developer IDT Australia (ASX:IDT) also saw its share price spike by almost 65% on Friday, after the company — which is primarily known for manufacturing medicinal cannabis products — revealed that it is currently investigating the feasibility of producing COVID-19 vaccines for the Australian Government.
“At the request of the Australian Government Department of Health, IDT is undertaking a feasibility assessment to assess the possibility of utilising the Company’s sterile manufacturing facility to supplement the production capability for a COVID-19 vaccine,” IDT said in a statement.
The Green Fund’s Australian Cannabis Index allows investors to benchmark top players in the Aussie cannabis space against the S&P500, the AORD, and HMMJ, giving them an overview of the health of the industry Down Under.