During the company’s most recent earnings call, Cresco Labs (CSE: CL) (OTC: CRLBF) CEO Charles Bachtell strongly implied that he believes federal marijuana reform is still on the horizon, despite the lack of progress to date on bills such as the SAFE Banking Act.
He’s also not worried about potential disruption or added regulations if marijuana is federally rescheduled.
“I’ve spent a lot of time in D.C. this year,” Bachtell said. “There are a lot of constructive conversations happening, and the right leaders are actively engaged around SAFE and the rescheduling of cannabis. There are solid indicators that progress is being made.”
Bachtell also shared that one of the issues being negotiated with members of Congress is a “safe harbor” provision for the most recent SAFE Banking Act, which would allow U.S. cannabis companies to potentially uplist to U.S. stock exchanges from the pink sheets.
“There’s an understanding of the need for safe harbor language all the way up through the U.S. exchanges and how that is an important component of the unlock of access to capital,” Bachtell said.
“It all comes back to: Do the legislators think that will add votes or take votes away?” he said. “And it really does end with the legislators, they – the legislators leading this initiative – want SAFE to pass. So it’s going to be their call on what they think they can have in there that will allow the bill to move forward and pass versus what would jeopardize it passing.”
Bachtell also downplayed fears among many in the industry that a possible rescheduling of marijuana from Schedule 1 to Schedule 3 – which has been touted as a likely outcome of the current scheduling review by the Biden administration – would not actually result in stricter federal oversight. He said such concerns are “exaggerated.”
Rather, Bachtell believes the states will continue to largely take the lead on overseeing the industry, and noted that much of the pushback against a federal crackdown would come from the states themselves, given the billions in tax revenue at stake.
“You’ve got 40 states now at this point that have their structure of either a medical or an adult-use program that they are comfortable with, that they pass laws to allow for,” Bachtell said. “And they’ve done that while cannabis is at a Schedule 1… So I don’t see that changing once a Schedule 3 or higher or lower depending on how you think about it, occurs.”