The rescheduling of cannabis in the United States is gaining momentum, sparking a crucial conversation about its impact on traditional banking and capital markets. Pablo Zuanic, an equity analyst covering cannabis and psychedelics, recently shared his insights, offering valuable perspectives on what this significant shift could mean for the industry’s financial future. Zuanic, a speaker at the upcoming Benzinga Cannabis Capital Conference, acknowledges the promise of rescheduling while emphasizing the uncertainties surrounding its timeline and ultimate impact.
The Biden administration has committed to rescheduling cannabis, a process that began in October 2022. While the administration aims for a swift completion, the complexity of the process has presented challenges. Zuanic explains, “Rescheduling is something that President Biden wanted to get done expeditiously in his term but done in a deliberate, systematic way, following the rules of the Controlled Substances Act.” The timeline remains unclear, but many are watching closely for developments that could emerge before the 2024 election. However, Zuanic highlights the possibility of the process extending beyond the current administration, stating, “All scenarios are on the table.” He suggests that while a final ruling could be delivered before the election, delays are equally possible. Zuanic believes that if Vice President Kamala Harris were to succeed President Biden, she would likely continue the rescheduling process into her term.
One of the most pressing concerns regarding rescheduling is its potential impact on cannabis businesses’ access to traditional banking services and capital markets. Currently, most cannabis companies are excluded from these services due to the plant’s federal classification. Zuanic anticipates that the completion of rescheduling could be accompanied by additional guidance from the Department of Justice. He explains, “Yes, there will be some form of accompanying memorandum at some point that would make it easier for banks to operate in the industry and for U.S. exchanges to uplift [cannabis stocks].” The uncertainty lies in the comprehensiveness of the rescheduling process. Zuanic acknowledges that the industry could witness progress if a memorandum from the DOJ clarifies how federal agencies will treat cannabis-related businesses. He also mentions the possibility of the long-discussed Safe Banking Act being passed as part of other legislation. “There’s still the possibility that Safe Banking can get done attached to a crypto bill,” he adds.
While rescheduling holds the promise of progress, Zuanic stresses the delicate balancing act involved. The administration must ensure the process is sufficiently thorough to withstand legal challenges. “If they rush it in the lame-duck, they could make it even more susceptible to legal challenges or even a CRA review,” he explains. This caution is essential to avoid setbacks that could further delay much-needed reforms.
With federal rescheduling on the horizon, the cannabis industry remains hopeful for more accessible banking and capital market opportunities. As Pablo Zuanic prepares to share his insights at the Benzinga Cannabis Capital Conference, many in the industry will be paying close attention to the future of cannabis financial services in the U.S. Cannabis rescheduling appears to be on the horizon. To understand what this means for the future of the industry, attend the 19th Benzinga Cannabis Capital Conference in Chicago this October 8-9. Hear directly from top executives, investors, advocates, and policymakers. Secure your tickets now before prices increase.
