HEF Finance

How will the potential Rescheduling of Cannabis to a Schedule 3 drug effect the financial services offered by banks?

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The rescheduling of cannabis from a Schedule I to a Schedule III drug would likely have a significant impact on FinCEN guidelines, in the long term, for banking cannabis at the federal (FDIC) level.

Current FinCEN guidelines

Under current FinCEN guidelines, banks are limited by extremely stringent and costly guidelines from providing financial services to businesses that sell or distribute cannabis, even if those businesses are licensed and operating in compliance with state law. This is because cannabis is still classified as a Schedule I drug under federal law, meaning that it has a high potential for abuse and no currently accepted medical use.

Impact of rescheduling

If cannabis is rescheduled to a Schedule III drug, it would be considered to have a lower potential for abuse and some currently accepted medical use. This may likely lead to a change in FinCEN guidelines, allowing banks to provide financial services to cannabis businesses without fear of violating federal law. However, with the traditional problems with money laundering in the sector, it also may the case that their AML guidelines would not change much, it at all, to reduce the cost of banking cannabis accounts.

Potential impact on the cannabis industry

he rescheduling of cannabis would have a major positive impact on the cannabis industry. It would allow businesses to access traditional banking services, such as loans, credit cards, and merchant accounts. This would make it easier for businesses to operate and grow, and it would also reduce the risk of crime associated with cash-only operations.

Timeline

It is unclear when or if cannabis will be rescheduled. The Biden administration has expressed support for rescheduling, but it would require an act of Congress. Even if Congress were to pass a bill rescheduling cannabis, it could take several months or even years for FinCEN to update its guidelines.

Conclusion

The rescheduling of cannabis would be a major step forward for the cannabis industry and would likely lead to a change in FinCEN guidelines, allowing banks to provide financial services to cannabis businesses. However, it is unclear when or if cannabis will be rescheduled, and it could take several months or even years for FinCEN to update its guidelines.

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