SAFE Banking: Myths & Truths
“The way in which we see things can hardly be distinguished from the way in which we wish to see them.” Joseph A. Schumpeter
Its crunch time (yet again) for a SAFE Banking Act Senate vote. The Act’s sponsors are scrambling to secure the necessary votes and right now its too close to call. A unique mythology has formed around SAFE, powered by the hopes of a long suffering and frustrated industry. If SAFE passes, the industry will celebrate, with an expected share bump across the sector.
But that is a big if - no one really knows if SAFE will pass and what will be in the final legislation.
Since the margin of winning votes will be slim (like 1-2 Senators), there will be feverish wheeling and dealing at the 11th hour to secure the necessary compromise.
The cannabis industry should gird itself for any number of outcomes if SAFE becomes law. We'd be wise to remember the old adage: be careful what you wish for. Here's why:
> What’s assumed to be in SAFE right now will not necessarily align with what’s signed into law. That’s not just SAFE, that’s how the Congress works.
When it comes to the cannabis industry, the devil is in the final regulatory details. We may want to suspend the over-the-top celebrations to read what’s in the fine print. For sure, not everyone will be happy with the compromise.
> SAFE may not end up being good for every cannabis firm particularly some publicly listed MSOs.
In fact, it could make things worse for some, for example, by reducing their existing competitive advantage in banking.
> We also need to keep things in context.
Getting SAFE is a good start but it by no means sets the industry on a purely positive trajectory. SAFE is only one piece of a broader agenda of needed reform. Rescheduling and/or descheduling, interstate commerce and removing 280e are more important regulatory problems. These necessary reforms are going in many different directions with no clear timeline.
> SAFE may be irrelevant with regards to bigger considerations
If you run a crappy business or are strategically challenged, this Act won’t fix that.
#Safebanking #safebankingact #MSO #banking