On May 21, 2024, the US Department of Justice (DOJ) published the highly anticipated notice of proposed rulemaking (NPRM) to reschedule marijuana (cannabis) from a Schedule I controlled substance to Schedule III, taking the first step to easing federal restrictions on cannabis and potentially opening up the door for further cannabis research and development. This regulatory change could have far-reaching implications for the cannabis, pharmaceutical and banking industries if promulgated in a final rule. Stakeholders interested in submitting comments to the DOJ must do so by July 22, 2024.
Federal statutes create risk for banks that want to operate in the cannabis space. Banks face the threat of civil actions, asset forfeiture, reputational risk, and even criminal penalties if they do business with customers in the cannabis industry. Further, because most banks will not touch cannabis money, the growers, processors, and retailers in the industry must often operate on a cash-only basis. The Internal Revenue Service has even had to build “cash rooms” to accommodate taxes paid by legal cannabis companies.
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