State-sanctioned U.S. cannabis businesses could soon list on major stock exchanges in their own country under legislation that a pair of congressmen filed on March 23.
The bipartisan Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, sponsored by Reps. Troy A. Carter Sr., D-La., and Guy Reschenthaler, R-Pa., would also provide a safe harbor to private financial institutions wishing to offer lending services to state-sanctioned cannabis businesses.
Under federal prohibition, U.S. cannabis companies are severely restricted from accessing the same lending services and investment opportunities as other American businesses, as well as their Canadian-based cannabis peers to the north, who enjoy the benefits of listing on major U.S. securities exchanges, such as the New York Stock Exchange and Nasdaq.
“This legislation is an opportunity to bring equity and equal opportunity into our nation’s growing cannabis industry,” Carter said Monday. “By working directly with small, minority and veteran-owned cannabis businesses, it’s clear that access to capital remains one of the biggest barriers to entry and to success in the industry. By bringing symmetry into the business ecosystem with the CLIMB Act, we can help communities that have long been harmed by the criminalization of marijuana become leaders in business – and that’s what the American Dream is all about.”
The legislation also aims to offer protections to government agencies – such as Community Development Financial Institutions (CDFIs), the Small Business Administration (SBA) and Minority Business Development Association (MBDA) – from using grants and other funding sources to assist cannabis businesses.
While cannabis remains a Schedule I drug under the Controlled Substances Act, American cannabis companies – big and small – are at a disadvantage when it comes to accessing the financial tools needed to either start their businesses or grow their businesses.
“The CLIMB Act will help unleash the full potential of the American cannabis industry,” said Saphira Galoob, CEO of the US Cannabis Roundtable. “Right now, Canadian cannabis companies can ring the bell at U.S. stock markets and access American capital markets while domestic cannabis businesses are largely locked out of even the most basic financial services. That’s not a level playing field. The CLIMB Act fixes this by ensuring American cannabis businesses, workers and investors have the same opportunities and access to financial services as foreign competitors.”
Under the legislation, ancillary service providers could offer state-sanctioned cannabis companies with the following “business assistance” without fear of federal retribution:
- providing a financial product or service;
- selling insurance or surety products;
- providing debt or equity capital or receiving dividends, interest or distributions of that capital;
- providing accounting services;
- the sale, lease or rental of real estate;
- providing equipment, parts, substances or testing services needed to produce cannabis in compliance with the laws and regulations in the applicable state;
- providing advertising or marketing services;
- providing management consulting services;
- providing legal services or compliance services;
- providing information technology, software or communications services;
- provision of packaging, transportation or other logistics services; and
- underwriting, dealing, placement or public distribution of securities issued by a cannabis-related legitimate business, including the listing of any such securities on any exchange or trading venue, or any provision of services related to the foregoing.
Curaleaf Chairman and CEO Boris Jordan released a statement applauding Reschenthaler and Carter’s bipartisan leadership on the issue.
“This legislation represents a common-sense step toward aligning federal policy with the realities of today’s cannabis industry,” he said. “For too long, U.S. operators have been constrained by outdated regulations that limit access to capital and prevent participation in major exchanges. Advancing the CLIMB Act would open the door to deeper institutional participation and oversight, while supporting the long-term stability and maturation of the section.
Jordan also said the legislation “underscores the need for broader federal action” to create a more rational and competitive framework for growth.
While President Donald Trump’s executive order in December, which directed Attorney General Pam Bondi to reclassify cannabis as a Schedule III drug, would loosen certain restrictions on cannabis businesses, further legislative reform would be needed to ease the path to traditional banking, lending and public trading opportunities.
Also, it’s been more than three months since Trump ordered Bondi to “expedite completion” of the Schedule III final rule, with no clear, binding deadline included in the directive.
