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Should Cannabis Investors Step Back on US Bets?

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Jun. 3 2019, Updated 4:22 p.m. ET

Slow to change

With only 11 states (one-fifth of all states) in the United States having legalized recreational cannabis, its acceptance in the country has been rather slow—especially if we consider that the first state to legalize recreational cannabis, Colorado, did so almost seven years ago. However, medical cannabis has met with more acceptance.

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Medical cannabis in the United States

Medical cannabis has received broader acceptance, with ~33 states legalizing it. As a result, Canadian companies Tilray (TLRY), Canopy Growth (WEED), and Aurora Cannabis (ACB) have made inroads into the United States.

However, broader regulatory challenges remain an overhang. For example, cannabis companies operating in the United States don’t have the banking support that regular businesses do.

In March this year, though, the US House Financial Services Committee advanced the SAFE Banking Act of 2019 with a 45–15 majority. The SAFE Banking Act would allow legitimate cannabis companies in the country to access the services of financial institutions. While the committee passed the act, it’s not a law yet. Read How the SAFE Banking Act Could Help Cannabis Players in the US to learn more.

Next, let’s discuss some other hurdles faced by cannabis companies in the United States.

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