Cannabis News of Note for the Week:
Politico Pro Cannabis (1/26/24): Rescheduling Could Ease Burden on Banking (paywalled newsletter, full text below)
Cannabis Reports of Note for the Week:
Politico Pro Cannabis (1/26/24): RESCHEDULING COULD EASE BURDEN ON BANKING — Moving cannabis to Schedule III could reduce the legal burden on banks that want to offer financial services to the cannabis industry, a new report published by libertarian-leaning think tank the Reason Foundation argues.
The primary worry hanging over banks serving the weed world is the possibility of money laundering, but major anti-money laundering laws like the PATRIOT Act — which was passed in 2001 to give financial institutions better access to information about money laundering activity in addition to terrorism — focus specifically on Schedule I and II drugs on the Controlled Substances Act.
Marijuana is currently a Schedule I drug — the same category as heroin. But the Department of Health and Human Services in August recommended that it be moved to Schedule III, and the Drug Enforcement Administration is currently reviewing that recommendation. If the DEA decides to move marijuana to Schedule III, that could change the legal implications of banking.
“Moving cannabis to Schedule III may thus reduce some financial institutions’ discomfort in servicing state-licensed cannabis businesses,” reads the report — written by Reason senior analyst Michelle Minton. It adds that “these changes would enhance the financial transparency of state-licensed cannabis businesses because banking records create an audit trail that is often missing within cash-based businesses.”
HHS’ review signals a shift in what determines medically accepted use, the Reason report also suggests. That’s because HHS and the DEA have previously used FDA approval as proof that a drug has medically accepted uses. But in the recommendation issues last year, HHS did not use this approval criteria.
“If accepted by the DEA, it may open the door to rescheduling other Schedule I substances, in addition to cannabis,” the Reason report concludes.