Federal Rescheduling: What It Could Mean for Cannabis Banking and Capital Markets

As cannabis rescheduling progresses, discussions about its implications for banking and capital markets have gained momentum. Pablo Zuanic, an equity analyst specializing in cannabis and psychedelics, shared insights during a recent interview. He noted that while the Biden administration is dedicated to cannabis rescheduling, the timeline remains uncertain. Rescheduling could improve access to traditional banking and capital markets for cannabis companies, but much depends on how comprehensive the final ruling is and whether additional legislation, like the Safe Banking Act, passes alongside it.

A Long-Awaited Move

Zuanic explained that rescheduling started in 2022, with President Biden aiming to complete the process within his term. However, due to its complexity and the strict procedures under the Controlled Substances Act, the timeline remains unclear. The decision could arrive before or after the 2024 election, and Zuanic suggested that if Vice President Kamala Harris wins, the process may continue into her first term.

The Banking and Capital Markets Question

One of the primary concerns is how rescheduling will affect cannabis businesses’ access to traditional banking services, which is currently limited due to cannabis’ federal classification. Zuanic believes that along with rescheduling, additional guidance from the Department of Justice may provide a clearer path for banks to engage with the cannabis industry and for cannabis stocks to list on U.S. exchanges. He also noted the possibility of the Safe Banking Act being included in other legislation, which would further aid the industry.

A Delicate Balance

Despite the optimism, Zuanic emphasized the need for a thorough and careful approach to avoid legal challenges. Rushing the process could leave it vulnerable to further delays. With federal rescheduling on the horizon, many in the cannabis industry are hopeful that it will bring more accessible financial services and opportunities for growth in the capital markets.

As Zuanic prepares to speak at the Benzinga Cannabis Capital Conference, industry professionals are watching closely, eager to understand how rescheduling could transform the financial landscape for cannabis businesses in the U.S.