H.R. 7987: Capital Lending and Investment for Marijuana Businesses Act

The bill known as the Capital Lending and Investment for Marijuana Businesses Act (CLIMB Act) aims to address issues related to financial services for cannabis-related businesses. Here is a summary of its main provisions:

Prohibition on Adverse Actions by Federal Agencies

The bill prohibits federal agencies from taking adverse actions against individuals or entities simply because they provide business assistance to legitimate cannabis businesses. This means that those who help these businesses—whether through financial products, services, or various forms of support—cannot be penalized by the federal government. The types of assistance that cannot trigger adverse actions include:

• Providing financial products or services
• Selling insurance
• Offering capital through debt or equity
• Providing accounting or legal services
• Engaging in real estate transactions
• Offering marketing or consulting services
• Providing testing services or supplies for cannabis production
• Any other services related to cannabis or its products

Definition of Cannabis-Related Businesses

The bill defines "cannabis" and "cannabis-related legitimate business" in alignment with existing legal definitions, incorporating businesses that operate in accordance with state laws governing cannabis activities.

Safe Harbor for National Securities Exchanges

The bill amends the Securities Exchange Act of 1934 to establish a "safe harbor" provision. This allows national securities exchanges the legal protection to list the securities of cannabis-related legitimate businesses without facing penalties under federal law. Specifically, the bill allows exchanges and market participants to:

• List or intend to list cannabis-related securities
• Permit trading of such securities on a national exchange
• Facilitate offerings and listings for cannabis securities

Effective Date

The provisions of this bill, as well as the amendments made to the Securities Exchange Act, would take effect 180 days after the bill's enactment.

Relevant Companies

• CRON: Cronos Group, a cannabis company engaged in the production and distribution of cannabis products, may benefit from the ability to list securities more freely.
• CGC: Canopy Growth Corporation, a leading cannabis company, could gain from increased investment opportunities and fewer federal restrictions affecting its market operations.
• AURAF: Aurora Cannabis Inc., which operates in the Canadian and international cannabis markets, might see changes in investment and liquidity related to its stock as a result of federal acknowledgment of cannabis-related investment.