The White House’s long-awaited marijuana control shake-up may be easier on the rules on paper, but for banks, processors, and payment networks, the changes are minor in practice.
While the rescheduling of marijuana from Schedule I to Schedule III has raised hopes for changes in the industry, the rescheduling does not change the ongoing barriers to small business marijuana in the US.
As large, publicly traded multi-state operators (MSOs) are protected from access to banks, most of the small marijuana companies still operate in a cash-only environment, with no state law, strict anti-money laundering laws, and a proposed bill that blocks broad access to financial services. Alan Brochstein, an analyst from Austin, Texas and founder of the marketing company New Cannabis Ventures, said. Global Finance that meaningful change still depends on the passage of the Secured Banking Act.
“Because you’re Schedule III instead of Schedule I, you’re legally illegal,” he said, referring to an April 23 order signed by Todd Blanche, President Donald Trump’s acting attorney general.
The amendment legalizes cannabis for medical use. But the change stops short of becoming official and serves as a sobering reminder of the legal ambiguity that has kept big financial players on their toes.
“So, I don’t think that’s going to change,” Brochstein said. “Visa and MasterCard will not allow you to be processed, [and] Reorganization doesn’t change that.”
The bipartisan SAFER Banking Act, proposed in 2023, would provide a safer environment for financial institutions serving state-sanctioned cannabis businesses, Brochstein explained. Lawmakers designed the bill to protect banks and credit unions from federal fines and asset forfeiture when they work with law enforcement officials in compliant states. It’s still pending in Congress.
Reorganization has its benefits—expanding research, reducing tax burdens, and continuing to guarantee national health care plans in 40 states. Cannabis operators, however, remain outside of mainstream banks. Lenders, card networks, and cross-border investors are unlikely to change their position significantly.
Change of Control, Financial Position
For now, reforming subsidies for medical cannabis has some legality, but the financial pipelines that support the industry remain tight. As a result, operators rely on complex currency and operating systems for each country, especially in markets where entertainment sales dominate revenue.
“I don’t think the banking situation will change that much at this time,” said Richard Ormond, a partner at the Los Angeles-based law firm Buchalter, capturing the tension in the industry as financial institutions sit on the sidelines.
“Things will remain cautious as most businesses, especially in California, are focused on recreational rather than medical use,” Ormond predicted.
A comprehensive review is forthcoming, with a Congressional hearing on the SAFER Act scheduled for June. Until then, cannabis suppliers are left with increasing progress in regulation—and continued uncertainty in the banking system.
