In this weekend Trade To Black Podcast, Shadd Dales and Benjamin A. Smith sat down with our special guest, Glass House Brands (OTCMKTS: GLASF) Co-Founder, Chairman, and CEO Kyle Kazan. A range of issues are discussed, with a focus on the U.S. midterm elections and its impact on the cannabis industry nationwide.
Although the incumbent Democrats were favored to retain control of the Senate for most of time during the build-up to November 8, momentum has turned rapidly against them in recent times.
According to the most recent projections by RealClear Politics, Republicans are now favored to win 53 seats in the Senate, with pickups in Arizona, Georgia and Nevada. A few weeks ago, it was the Democrats that were projected to pickup 3 or 4 seats—although the House has been consistently forecast to flip to GOP control.
The potential ramifications of Republican control in the U.S. Senate for the cannabis industry are many.
Most pointedly, Mitch McConnell would retake a Senate Majority Leader position—the same position he held during the Trump administration. When there, McConnell consistently refused to supports any cannabis reform emanating from the House, leaving prospective bills to wither on the vine.
More recently as Senate Minority Leader, McConnell did not nominate any of the nine Senate Republican co-sponsors to the U.S. Innovation and Competition Act conference committee this spring, where SAFE was attached to the House version of the bill. McConnell further attacked House Democrats’ efforts to include “marijuana banking” in the package.
Although there’s little evidence that McConnell would move on broader legalization initiatives, some analysts believe a red Senate could prompt current Senate Majority Leader, Chuck Schumer, to act. Investment bank Cowen is projecting that in a red Congress scenario: “With eased pressure on progressives to push for social justice provisions due to Biden’s actions, a narrow version of SAFE should pass.”
Should the SAFE Banking Act pass, it should have beneficial effects on the U.S. cannabis industry. The bill generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business. The language restricts the termination or limiting of deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate cannabis-related business, among other things.
We discuss this and other impacts of the midterm election outcome on U.S. cannabis.
To view or previous Trade To Black Podcast, click here.