The White House’s long-anticipated cannabis regulatory shake-up may ease rules on paper, but for banks, processors, and payment networks, little changes in practice.
While the rescheduling of cannabis from Schedule I to Schedule III has sparked hope for industry reform, the reclassification doesn’t change the ongoing banking hurdles for smaller cannabis businesses in the U.S.
As large, publicly traded multi-state operators (MSOs) secure banking access, the majority of smaller cannabis companies still operate in a cash-only environment, with federal illegality, strict anti-money laundering rules, and a stalled bill blocking wider access to financial services. Alan Brochstein, an Austin, Texas-based analyst and founder of marketing firm New Cannabis Ventures, told Global Finance that meaningful reform still hinges on the passage of the SAFER Banking Act.
“Just because you’re Schedule III instead of Schedule I, you’re still federally illegal,” he said, referring to an April 23 order signed by Todd Blanche, President Donald Trump’s acting attorney general.
The reclassification formally recognizes cannabis for medical use. But the shift stops short of legalization and serves as a sobering reminder of the legal ambiguity that has kept major financial players wary.
“So, I don’t think that’s going to change,” Brochstein said. “Visa and Mastercard won’t allow processing, [and] rescheduling doesn’t change that.”
The bipartisan SAFER Banking Act, proposed in 2023, would provide a safe harbor for financial institutions serving state-sanctioned cannabis businesses, Brochstein explained. Lawmakers designed the bill to shield banks and credit unions from federal penalties and asset forfeiture when working with legal operators in compliant states. It remains stalled in Congress.
The reclassification has its benefits—expanding research, reducing tax burdens, and further legitimizing state medical programs across 40 states. Cannabis operators, however, remain boxed out of mainstream banking. Lenders, card networks, and cross-border investors are unlikely to change their stance substantially.
Regulatory Change, Financial Stagnation
For now, rescheduling grants medical cannabis some legitimacy, but the financial plumbing that underpins the industry remains frozen. As a result, operators rely on cash-heavy systems and state-by-state workarounds, especially in markets where recreational sales dominate revenue.
“I don’t think the banking landscape will change that much at this time,” said Richard Ormond, a partner at Los Angeles-based law firm Buchalter, capturing the industry’s central tension as financial institutions stay on the sidelines.
“Things will remain cautious as the majority of businesses, particularly in California, really focus on recreational use rather than just medical use,” Ormond predicted.
A broader review is coming, with Congressional hearings on the SAFER Act scheduled for June. Until then, cannabis suppliers are left with incremental progress on regulation—and persistent uncertainty in the banking system.