Pot-banking legislation was dealt “a body blow” by Senate Banking Chairman Mike Crapo’s unexpectedly strong opposition Wednesday, significantly reducing the odds that it will be passed in 2020, according to Compass Point analyst Isaac Boltansky.

The Secure and Fair Enforcement Banking Act was widely seen as the cannabis legislation with the best chance of securing Republican support, as it focused on public safety in an environment where many marijuana businesses have to pay their employees and even their taxes in cash because they don’t have access to commercial banks. But with Crapo expressing “significant concerns” about the bill, the odds are now against its enactment before the 2020 election, analysts said Thursday.

The development is another setback for the pot industry, which is struggling with regulatory hurdles, missed earnings forecasts and a cash crunch. Stocks have lost about two-thirds of their value since their highs in March and the decline continued for some on Thursday, with Tilray Inc. briefly falling below its July 2018 IPO price for the first time.

Here’s what analysts had to say:

Compass Point, Isaac Boltansky

“The chairman’s statement clearly reflects a considerable amount of thought and staff-level work on the matter, but it is a body blow to the cannabis banking effort in this Congress,” Boltansky wrote.

There’s still a viable scenario where Crapo’s concerns are addressed and the legislative text is included in a broader bill, but “the odds are now clearly against enactment in this Congress.”

Boltansky “never expected Chairman Crapo to be an ardent advocate of the effort given his views on cannabis,” but thought a variety of pressures “could get him to neutral.” In retrospect, “it is clear that we were too optimistic.”

Cowen, Jaret Seiberg

The likelihood of enactment before the end of 2020 has dropped to 33 per cent, said Seiberg, who still sees room for a “last-minute compromise or inclusion of a narrower package in the 2021 spending bill,” otherwise the odds would be even lower.

Seiberg previously believed that Crapo “would overcome his own objections to cannabis to move a bill that the banks both want and believe is a public safety priority,” but was forced to reassess that view after Crapo’s “blistering memo.”

On a more positive note, Seiberg noted that legislation expanding cannabis research is getting a boost with House Republican support and has a 70 per cent chance of enactment before the end of 2020. He remains optimistic about the long-term prospects for legalization, but cautioned that Democrats’ focus on social justice reform could “backfire.”

Bloomberg Intelligence, Nathan Dean

Crapo’s opposition “just shows how difficult an issue it is and why we still believe it’s unlikely to pass next year,” Dean said.

People had been optimistic when Crapo allowed a hearing, as it showed the Senator was “open to it.” However, “overall opposition to marijuana legislation may just be too much for this bill.” Dean said he believes the bill will pass sometime in the next two to four years as “more and more states legalize marijuana, but an election year probably won’t allow it in 2020.”