Cannabis Industry Hopes to Break Free from Cash-Only Status with Reclassification
The cannabis industry, which has grown to an estimated $30 billion in annual revenue, has long been hampered by its cash-only status. This is due to the fact that cannabis remains classified as a Schedule I drug under federal law, making it difficult for businesses to access traditional banking services and electronic payment processing. However, a recent executive order from President Donald Trump to fast-track the reclassification of cannabis could be a game-changer for the industry.
Currently, licensed dispensaries are unable to accept credit or debit card payments, and many struggle to get loans from traditional banks due to the high-risk nature of the industry. This has led to a reliance on cash, which creates security risks for employees and businesses alike.
The reclassification of cannabis to Schedule III, along with regulated pharmaceuticals like anabolic steroids and Tylenol with codeine, could pave the way for dispensaries and growers to access traditional banking services and electronic payment processing. This would not only make it easier for businesses to operate but also provide a more secure and transparent way to manage finances.
Experts believe that the reclassification of cannabis could have a significant impact on the industry, making it easier for businesses to access financing, grow, and operate more efficiently. It could also bring “a lot of responsible capital” into the space, according to Elad Kohen, founder and CEO of The Flowery, a cannabis company that operates 26 stores across Florida and New York.
However, there are still obstacles to overcome, including legal uncertainty, the value of collateral, and concerns about suspicious activities. Banks are hesitant to serve the cannabis industry due to these issues, but experts believe that the reclassification of cannabis could help alleviate these concerns.
The impact of the reclassification of cannabis could be far-reaching, not only for the industry but also for the broader economy. It could bring in billions of dollars in revenue and potentially create tens of thousands of new jobs.
As the cannabis industry looks to the future, it is clear that the reclassification of cannabis could be a watershed moment. It could bring legitimacy to the industry, make it easier for businesses to operate, and provide a more secure and transparent way to manage finances.
