Industry Insiders: Trulieve CEO, Kim Rivers on the latest in U.S. cannabis regulation
The CEO of a U.S.-based cannabis company says legislation set to be reviewed by lawmakers this week would ease significant financial burdens for her business.
“We’re just asking to be a normal business,” Kim Rivers, CEO of Trulieve, told BNN Bloomberg in a Tuesday interview.
“We operate in 10 states, have over 5,000 employees and pay a lot of money in taxes. This would help ease some of that burden.”
The Secure and Fair Enforcement Regulation Banking Act (SAFER) is set to be reviewed by a U.S. Senate committee on Wednesday, who will then decide whether to send the bill to a Senate floor vote.
The proposed legislation would provide cannabis companies access to traditional banking services, like credit, loans and financial services essential to running a business.
For her company, which sells medical and recreational cannabis in the U.S., Rivers said these changes would be a “significant win” for operators and employees in the cannabis sector, who are limited to cash transactions in the U.S.
“Currently, cannabis is a cash-only business,” Rivers said, “which leads to significant safety issues for us and our employees.”
Just this week, she said, one of Trulieve’s dispensaries was broken into.
“They were after the cash,” she recalled.
The SAFER Banking Act has been passed by the U.S. House of Representatives many times and Wednesday is its first chance to go to the Senate for a vote.
This is giving cannabis companies hope in the markets, pushing Trulieve’s stock above eight per cent on Tuesday.
Despite historic challenges to getting cannabis regulation passed in the U.S., Rivers says she’s optimistic this one will go through.
“We feel we have great support in the Senate for a positive vote tomorrow,” she says. “We absolutely believe this has the potential to be the first bipartisan supported piece of cannabis policy that could clear Congress.”
CHANGING CANNABIS’ REPUTATION
Another big regulatory review happening in the cannabis sector right now is around the way the substance is classified.
The U.S. Drug Enforcement Administration (DEA) currently classifies cannabis as a Schedule I drug, putting it in the same category as heroin, LSD and methamphetamine. This classification has long been a headwind for the marijuana industry, making it challenging to update regulations for the sector in the United States.
Last month, the U.S. Food and Drug Administration (FDA) recommended the substance be changed to a Schedule III drug in the Controlled Substances Act (CSA), sparking a review of this classification by the DEA.
If cannabis is placed in the Schedule III category, its definition would become a “drug with a moderate to low potential for physical and psychological dependence” according to the DEA, and would make it easier for cannabis companies to access the financial services Rivers is advocating for.
“Moving to a Schedule III classification would remove some tax burden for us,” Rivers said.
“In the past two years, we’ve paid over US$223 million in cash for taxes attributable to this, so this change would put our taxes in a normal business environment and would be a significant mover for financial metrics.”
IMPACT ON THE INDUSTRY
Rivers said the SAFER Banking Act and new cannabis classification would be the start of big changes in the U.S. marijuana industry – and could lead to more investment.
“This time it’s real and it’s healthy for the industry,” she said. “Folks are starting to come back into the sector, asking questions, doing the work and laying some foundational ground works for investments in the near future.”
She also has hope that more regulatory changes are on the horizon to make U.S. operations easier for cannabis companies like hers.
“There are more bills we expect to be filed in the near-term, so this is the beginning of a seismic shift when it comes to cannabis and how it’s regulated in the U.S.”