The CLIMB Act, a new banking bill on cannabis

Forget the SAFE Act, which has been rejected a 6th time on June 23, here's the CLIMB Act.

The Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, sponsored by Democratic Representative Troy Carter and Republican Representative Guy Reschenthaler, aims to facilitating the cannabis industry's access to the banking sector, This is achieved in part by providing protection for private financial institutions and government agencies that provide such services to traditional markets.

It also provides, for the first time, a «safe harbor» for national securities exchanges and market participants who «have listed, list or intend to list, or permit the trading of, or facilitate the offering, listing or trading on a national securities exchange, of securities of a legitimate cannabis-related business or service provider».

In short, cannabis companies would be allowed to list on major stock exchanges such as Nasdaq and the New York Stock Exchange (NYSE). The only cannabis companies listed in the USA today are those that do not directly deal with the plant on federal soil. like Weedmaps.

The bill states more broadly that no federal agency would be allowed to penalize a business or government authority for «receiving funding, appropriations, grants, contracts, or other monetary or non-monetary assistance from a government authority, or for marketing, offering, or selling a security, banking, insurance, or other financial services product» simply because the business or individual is «providing business assistance to a legitimate cannabis-related business or service provider.».

So, for example, the bill would theoretically protect an agency like the federal Small Business Administration (SBA) from being penalized by another agency (e.g. the Department of Justice) for providing its services to legal cannabis businesses. However, it in no way obliges the SBA to provide such services to the industry.

For now, the future of the CLIMB law is as clear as a Roor tip after a J of dry sift, The bill must first win sufficient support in Congress.

The full text of the bill is available here.