When President Trump announced that his administration would “move quickly” to reschedule cannabis and signed his executive order, much of Washington took notice. Republican senators like Lisa Murkowski, Dan Sullivan and Kevin Cramer called the proposal a “game changer” for cannabis policy. They’re right that the move could reshape the political landscape. However, for those of us working inside the industry, especially in cannabis finance, the reality is more complicated.
Rescheduling would mark long-overdue progress, but it would not end the banking bottleneck, erase compliance burdens or magically integrate cannabis into the mainstream economy. In short, rescheduling is not deregulation.
A Welcome Step, Not a Revolution
Moving cannabis from Schedule I to Schedule III would deliver immediate, tangible relief by ending the 280E tax penalty that prevents legal operators from deducting basic business expenses. That single change would inject new liquidity into an industry still reeling from high capital costs and razor-thin margins.
But eliminating 280E is not the same as dismantling prohibition. Cannabis businesses will still operate under a dense patchwork of state and local rules, including licensing, security, labeling, testing, tracking and packaging among them. Federal agencies are unlikely to take a hands-off approach. If anything, they may impose new layers of oversight once the plant is no longer treated as contraband.
If cannabis were placed in Schedule II, the rules could become even stricter, potentially invoking DEA registration, FDA manufacturing standards and prescription-style dispensing requirements. Even at Schedule III, businesses could face dual reporting and inspection regimes that mirror those governing pharmaceuticals and alcohol.
State governments, which rely on cannabis tax revenue, won’t abandon their own systems either. If Washington introduces a federal excise tax post-rescheduling, operators or their customers could find themselves paying both federal and state rates on the same dollar. That’s not deregulation. It’s doubling down on it.
Banking Access Will Remain Constrained
The notion that rescheduling will finally unlock mainstream banking is a comforting myth. As long as cannabis remains subject to the Controlled Substances Act, regulators overseeing the Bank Secrecy Act and anti-money-laundering (AML) laws will continue to treat cannabis proceeds as high-risk activities warranting additional scrutiny.
Every financial institution serving this industry must still perform enhanced due diligence, monitor every transaction and file Suspicious Activity Reports for cannabis-related accounts. Those requirements stem from FinCEN’s 2014 guidance, which remains in effect until replaced. This rigorous oversight isn’t going away nor should it. Cannabis remains a high-risk sector because participants operated in a gray zone long before state legality took hold. That history demands heightened scrutiny.
For specialized financial services institutions in the cannabis sector, that complexity isn’t a deterrent; it’s the business. Many have built these models around navigating those compliance challenges so that legitimate operators can access secure, transparent financial services within a lawful framework.
According to data released by the New York State Department of Financial Services, only 10 financial institutions—seven banks and three credit unions out of nearly 700 statewide—were openly serving cannabis businesses statewide. Nationwide, participation hovers in the low hundreds, dominated by smaller community institutions willing to absorb compliance costs few others will touch.
Until Congress passes a safe-harbor law like the long-stalled SAFER Banking Act that risk calculus won’t change. Despite bipartisan support, the bill remains frozen under new congressional leadership. Senate Banking Chair Tim Scott has expressed clear opposition and House Speaker Mike Johnson has previously voted against reform. That political gridlock means cash will remain king for most dispensaries, perpetuating the public-safety hazards that come with an all-cash industry. Even the Trump proposal hasn’t moved those legislative levers yet, but the road will still be long.
Compliance Will Define the Next Era
Whether Trump’s plan materializes in weeks or months, one constant remains: compliance will be the cost of doing business. Even after rescheduling, cannabis companies will need to maintain exhaustive internal controls, seed-to-sale traceability and documented sourcing to satisfy both state regulators and federal auditors.
For banks and credit unions, AML obligations will persist. They must continue verifying customers’ ownership structures, reviewing licenses, cross-checking transactions against state registries and filing SARs for any anomalies. None of that changes with a new schedule number.
There is some discussion within the banking and regulatory community, including at recent industry conferences — about modernizing certain thresholds, such as raising the Currency Transaction Report (CTR) requirement from its long-standing $10,000 level, first set decades ago, to as high as $80,000. Such a shift would represent a major recalibration of financial reporting standards. Still, until those conversations translate into policy, institutions must operate under existing AML rules and continue treating cannabis as a high-risk sector demanding enhanced oversight.
New oversight may also emerge. The FDA could assert authority over cannabis manufacturing, labeling or marketing, particularly for products that make therapeutic claims. That would bring the same rigorous Good Manufacturing Practices used in pharmaceuticals into a space that’s largely operated like agriculture. The result just may not only be a cleaner, more transparent industry, but also one that must budget heavily for compliance expertise.
These aren’t obstacles to lament, but rather realities to plan for. The operators who treat compliance as a strategic investment, not an afterthought, will be the ones who attract institutional capital once the legal barriers begin to fall.
Politics Can Shift the Optics, Not the Obligations
Trump’s recent Truth Social post invoking the body’s endocannabinoid system and its supposed role in health and wellness, added a flair to the broader cannabis conversation. The post signaled a notable shift that cannabis is no longer a fringe or partisan issue but a mainstream economic and public health topic that elected officials can no longer ignore.
That shift matters. Political cover from a Republican president could make incremental reforms like banking access or research expansion more palatable to conservatives who have long opposed them. However, those downstream effects will take time, negotiation and legislation.
Meanwhile, the industry must prepare for a paradoxical reality that greater legitimacy often brings greater scrutiny. The same federal agencies that once ignored cannabis will soon start enforcing new rules for it. Operators hoping for regulatory relief may instead find themselves in a more formalized, but no less demanding, system.
A Path, Not a Shortcut
If the Trump administration follows through, cannabis rescheduling will signal the end of one era of prohibition and the start of another marked by accountability and transparency. It would validate decades of advocacy and align federal policy with public sentiment.
However, it will not, at least not immediately, solve cannabis banking, lower compliance costs or make financing frictionless. Those milestones depend on Congress and regulators modernizing the laws that govern financial crime, taxation and interstate commerce.
Rescheduling is not a finish line. It’s the starting gun for the next phase of cannabis reform. Whether you’re an operator, an investor or a policymaker, the work ahead will demand patience, pragmatism and precision. Because while politics can change overnight, compliance never sleeps.
