Incoming Senate Banking Committee open to cannabis banking reform
According to Politico's recent reports, Senator Pat Toomey (R-PA) is open to supporting the SAFE Banking Act. The legislation, which would provide cannabis businesses with access to banking services, passed the House last year with bipartisan support.
“I am sympathetic to the idea that people who are involved in [the] cannabis industry—in an entirely legal fashion, in the state in which they operate—ought to be able to have ordinary banking services,” Toomey said. “That's my starting point, and then there's a lot of details to work out, but I am open to that.”
Toomey is not seeking re-election in 2022. He has voiced support for medical marijuana research; otherwise, he does not support legalization. In June 2015, Toomey applauded the Obama administration for eliminating a criticized Public Health Service review that impeded medical marijuana research. Toomey represents a state with a fast-growing medical marijuana program and a governor who wants to legalize adult-use, which may pressure him towards more cannabis reform.
“We are encouraged by Sen. Toomey’s words and look forward to working with him and the Senate Banking Committee. Cannabis reform can cross party lines and lead to sound, modern approaches to unlocking the industry’s potential,” said Kim Rivers, National Cannabis Roundtable second vice chair and chief executive officer of Trulieve Cannabis Corp.
We hosted a speaker call on November 6th, going over the industry's election implications with two expert speakers on the topic. Andre Haroche is a co-founder of Silverleaf Venture Partners, a cannabis-focused venture capital firm. J.T. Taylor is Hedgeye's Chief Political Strategist.
In our conversation with Andre and J.T., we cover where we think the industry is headed with the across the board victories of state ballot initiatives, assess how legislative dynamics could impact companies in the space, take a closer look at key political figures and their stances on cannabis, and map out potential legislative timelines for reform (SAFE, STATES, MORE, and descheduling).
|
CLICK HERE for event replay (includes video and materials link). |
IIPR expands partnership with Kings Garden in California
IIPR is a Hedgeye Cannabis Best Idea LONG.
IIPR announced that it is extending its long-term real estate relationship with Kings Garden Inc. (Kings Garden), one of California’s top cannabis producers, with the acquisition of a Southern California property, which comprises approximately 192,000 square feet of industrial space. The purchase price for the property was approximately $25.4 million (excl. transaction costs). Kings Garden intends to operate the property as a licensed cannabis cultivation and distribution facility upon completion of redevelopment. IIPR has agreed to provide reimbursement of up to $25.0 million. Including this property, IIP leases six properties to Kings Garden, representing approximately 364,000 square feet of industrial space and a total commitment (including purchase prices and commitments to fund tenant improvements, but excluding transaction costs) of approximately $95.0 million.
In September, we presented our long thesis on IIPR. It stands in a unique position at the intersection of the cannabis industry and the REIT space in a rapidly changing legislative landscape, earning outsized returns in the current environment with few competitors.
|
CLICK HERE for the replay (includes video and materials link). |
State leadership in Virginia and Rhode Island put adult-use on the table in 2021
In a continuation of the green wave that swept the elections, state leadership in two east coast states put legalization on the table in 2021.
Gov. Ralph Northam (D) wants Virginia to legalize cannabis and plans to work with state lawmakers to pass legislation in 2021. “We are going to move forward with the legalization of marijuana in Virginia. I support this, and I’m committed to doing in the right way,” he said during a briefing. “Marijuana laws have been based originally in discrimination and undoing these harms means things like social equity licenses, access to capital, community reinvestment and sealing or expunging people’s prior records.”
Some of the findings in a report put forward by the state's Joint Legislative Audit and Review Commission (JLARC) suggest:
- By legalizing marijuana, the state would see an 84% reduction in cannabis-related arrests.
- If the state enacted the reform and taxed marijuana sales at a rate of 25-30%, it could bring in $154-308 million in revenue annually five years after implementation.
- The cannabis program could also create upwards of 11,000 jobs by year five.
In Rhode Island, two leading House lawmakers affirmed that the state has a strong chance of passing adult-use legalization in 2021. Incoming House Speaker Joseph Shekarchi (D) said in an interview last week that chamber is “very close” towards having majority support for the policy change. Incoming House majority leader, Rep. Christopher Blazejewski (D), has co-sponsored a bill to legalize cannabis in the past. Blazejewski said that legalization is “certainly something we’ll take a look at.”
