Topic: Banking/Financial Services

Pennsylvania Governor Pushes State-Run Cannabis Dispensaries

Several states are advancing adult-use cannabis legalization efforts, but Pennsylvania Governor Tom Wolf is again promoting a unique approach to a recreational marijuana market: state-run marijuana distribution. A recent article in PoliticoPro (subscription required) dives into the issue and provides great context and analysis on whether this proposal is feasible and its chances to succeed.

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Latest Senate Coronavirus Relief Bill Omits Cannabis Banking Protection

Once again, the Senate appears to be punting on much-needed banking and insurance reform for the cannabis industry.  The SAFE Banking Act would allow banks and insurance companies to offer their services to marijuana-related businesses without violating federal law. As we discussed here, it’s had solid support in the House—a standalone bill passed the House with bipartisan support last year and the text of the bill was included in the House’s proposed stimulus package in May 2020.

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Significant Financing Deal A Good Sign for Cannabis Companies Large and Small

According to a recent Bloomberg article, New York-based LeafLink recently closed a significant credit facility of $250 million. Leaflink is a wholesale marketplace that connects retailers with a variety of brands and distributors in the legal cannabis marketplace. LeafLink also assists in providing liquidity to the broader market by factoring accounts receivable.

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Where’s the Money At? Industry Cash Crunch Exacerbated by the Pandemic

If you’ve been following the cannabis industry in 2020, you’ve likely heard the term “cash is king” more than once. This has become the industry consensus as stocks (mostly traded in Canada) began to slide after some disappointing earning numbers in the middle of 2019. That, in turn, resulted in decreased valuations and a reduction in investment capital.

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Timing Matters: United Cannabis and the U.S. Trustee Compare Apples and Oranges in Recent BK Filings

As we wrote about here, United Cannabis’s bankruptcy proceeding has been under a microscope since the moment the papers were filed. The Hon. Joseph Rosania immediately entered a rule to show cause order instructing United Cannabis to explain why the revenue it generates from activities related to marijuana should not result in dismissal.

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Sen. Gardner: SAFE Banking Act Could be Passed “In a Matter of Months”

As we’ve written about extensively, the SAFE Banking Act has gone through several twists and turns. The proposed bill would remove restrictions on banks and insurance companies that effectively prohibit them from offering services to marijuana-related businesses. Because of these restrictions, most cannabis businesses are forced to operate in cash only, which causes a multitude of problems, from safety to logistics to tax oversight.

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SAFE Banking Act in “Stall Pattern”

After passing the House in September with bipartisan support, the SAFE Banking Act seemed to have momentum. Senate Banking Chair Mike Crapo even stated he wanted his committee to mark up the bill before the end of this calendar year. But after committee members raised a few small issues, negotiations slowed significantly, eviscerating the bill’s previous momentum.

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