Kevin Murphy, the founder of marijuana chain Acreage Holdings, says that Congress is likely to vote this year to allow cannabis businesses to use federally-regulated banks.



The House and Senate have conducted hearings this year on the Safe Banking Act, which would let companies like Acreage (ticker: ACRGF or ACRG-U.Canada) deposit their stacks of cash. Marijuana is legal in some states but illegal under federal law so banks fear they could be prosecuted for money laundering.



“Safe banking is what we believe to be the first bill that will be passed,” Murphy, who is also Acreage’s chief executive officer, said Wednesday on the company’s earnings call.



Even some Republican senators seem to realize that public safety and the oversight of cannabis would increase if cash wasn’t piling up at Acreage, he said.



“Conservative Republicans are all about safety and they’re all about taking cash out of the system,” Murphy said.

While the U.S. operators only sell pot where it’s legal under state law, the weed remains federally proscribed and most banks refuse to deal with pot companies. Workers at Acreage have even lost federal pensions, because of the federal illegality of its products.

Murphy noted that the banking act won’t include measures allowing companies like his and Curaleaf Holdings (CURLF), Green Thumb Industries (GTBIF) and Harvest Health and Recreation (HRVSF) to access U.S. capital markets.



Shunned by American underwriters and stock exchanges, Acreage and others sell their shares in Canada, where they’ve gotten listings on the Canadian Securities Exchange. Conservative congressmen won’t support opening U.S. capital markets under the Safe Banking Act because they don’t want to provide fuel for his industry’s growth, Murphy said.



To find that fuel, Acreage arranged to sell itself to the Canadian cannabis leader Canopy Growth (CGC)—itself controlled by the beer and wine giant Constellation Brands (STZ)—once cannabis becomes federally permitted in the U.S.

Federal permissibility would follow if Congress passes the States Act. That bill would lift federal prohibitions against pot in the states that have legalized the drug. Other bills have been proposed, Murphy noted, and the confusion convinces him that no federal law permitting pot sales will appear within the next 18 to 24 months.



Recreational cannabis will probably be part of next year’s budget bill in New York state, with New Jersey close behind, he said.



For the quarter ended in June, Acreage reported revenue of $18 million, about a 40% rise from the March quarter. The New York-based company lost $34 million, or 40 cents a share, as it built new dispensaries and cultivation facilities, but didn’t open any new shops in the quarter. Acreage said regulators in Ohio and Massachusetts have been slow to approve the company’s purchases of operations in those states.

Delays resulting from its partnership with Canopy also led Acreage to cut the number of shops it hopes to open this year, to a range of 35 to 45, from its previous target of 50 to 60.



Acreage shares on Wednesday closed down 9.5%, at $11.17.

Write to Bill Alpert at william.alpert@barrons.com