New era for pot regulation leaves old problem: Many cannabis companies can’t find a bank

LOS ANGELES — The Biden administration’s move to reclassify marijuana as a less dangerous but still controlled drug was hailed as a monumental step in reshaping national policy. “Cannabis would still be illegal under federal law, and that is a line many banks in this country will not cross.” Most Americans live in states where marijuana is legally available in some form. Congress needs “to bring federal cannabis policy into the 21st century.” Under the Biden administration plan, the U.S. Drug Enforcement Administration would move marijuana from its current classification as a Schedule I drug, alongside heroin and LSD, to a Schedule III drug, alongside ketamine and some anabolic steroids. Even with rescheduling “cannabis companies should expect that banking services will still be expensive.” Dotan Y. Melech, CEO of cannabis credit rating agency CTrust, echoed that, saying, “The reality is that current lending practices are unlikely to change without better understanding cannabis risk.” A Congressional Research Service report last year said about 675 financial institutions — a fraction of the banking industry — are doing business with cannabis companies. The nonpartisan agency also noted that “the depth and breadth of financial services that depository institutions are providing to marijuana businesses is unclear.” Adam Goers, senior vice president of multistate operator The Cannabist Company, who chairs the industry group Coalition for Cannabis Scheduling Reform, called the administration’s proposal a historic step that would open the way for research and much-needed tax changes that would benefit operators.