Cannabis Banking and Major Exchange Listings Don’t Need a New Law. They Need Updated Guidance.

By Anthony Deininger, Law Student

The cannabis industry has spent years waiting for Congress to solve what is, at least in substantial part, an administrative problem.

The Secure and Fair Enforcement Regulation Banking Act (SAFER Banking Act) has been treated as necessary for access to institutional banking, exchange listings, and the financial infrastructure that other lawful businesses take for granted. The industry has organized around a congressional timeline that existing federal law may not require. That reliance has delayed not only broader banking access but also the clearing and custody arrangements needed for listing on major U.S. exchanges.

In April 2026, the Department of Justice and the Drug Enforcement Administration issued a final order moving cannabis products approved by the Food and Drug Administration (FDA) and qualifying state-licensed medical cannabis activity to Schedule III. That order materially altered the federal risk posture that has shaped cannabis banking and institutional capital access for more than a decade.

The cost of continued uncertainty is concrete. The cannabis industry generated $30 billion in revenue in 2024 and, according to Vangst’s 2025 estimate, employed 425,000 people. Yet the industry remains structurally excluded from ordinary financial infrastructure. Few U.S. banks serve cannabis businesses, leaving much of the industry dependent on cash and exposed to public safety risks. Many operators still rely on fragmented payment systems and high-cost private credit simply to remain operational. Major multi-state operators lacking access to conventional refinancing channels face $6 billion in debt maturities. Companies are selling licenses, winding down operations, and restructuring—not because their businesses have failed but because the financial system remains closed under legal assumptions that rescheduling has fundamentally altered.

Financial systems become unstable when supervisory ambiguity, rather than underlying commercial risk, determines access to capital. The industry is waiting while the banking framework stays frozen.

In 2014, the Financial Crimes Enforcement Network (FinCEN) issued guidance instructing banks how to manage cannabis-business relationships. Because federal law then prohibited the distribution and sale of marijuana, FinCEN treated transactions involving marijuana-related businesses as generally involving funds derived from illegal activity. It also imposed cannabis-specific Suspicious Activity Report (SAR) filing protocols even for businesses licensed under state law.

The guidance was predicated on Schedule I classification and constructed around the anti-money laundering assumptions associated with that status. Functionally, it operated as a supervisory overlay on preexisting compliance obligations. It imposed significant practical burdens on federally regulated institutions. These cannabis-specific monitoring, examiner scrutiny, and enhanced reporting obligations were onerous enough that most federally regulated institutions declined to serve the sector at all.

But the 2014 FinCEN guidance was just a memo: not a statute, regulation, or notice-and-comment rule. Like the Cole Memo, which Attorney General Jeff Sessions rescinded in January 2018 by a single-page memorandum, Treasury Secretary Bessent can revise FinCEN guidance unilaterally.

The issue is narrower than whether Congress should enact statutory safe-harbor legislation. Congress plainly could. Treasury does not need Congress to repeal a prohibition that it does not currently sustain. The question is whether Treasury guidance must remain unchanged after rescheduling.

The reality is that the persistence of the current framework now reflects institutional choice more than legal necessity.

Schedule I status was the basis for treating cannabis-business transactions as categorically suspicious. Schedule III does not make all cannabis commerce federally lawful, nor does it create a statutory safe harbor for financial institutions. But guidance built around an outdated premise does not reflect the current federal posture toward qualifying medical cannabis activity.

For years, the Department of Justice has been subject to appropriations restrictions that prohibit the use of federal funds to interfere with state medical cannabis programs. Courts interpreting those riders have repeatedly recognized limits on federal enforcement against state-compliant medical cannabis activity. The April 2026 order reinforces that shift by treating qualifying state medical cannabis licenses as conclusive evidence of state authorization. That approach reflects a cooperative-federalism model difficult to reconcile with categorical, status-based suspicion.

FinCEN has already operated under a similar framework. After the removal of hemp from the Controlled Substances Act (CSA) definition of marijuana, FinCEN advised financial institutions that they need not file SARs solely because a customer engaged in lawful hemp activity. Banks were instead expected to apply ordinary risk-based monitoring under the Bank Secrecy Act (BSA). The hemp analogy is imperfect because hemp was fully removed from Schedule I, whereas cannabis activity now occupies a hybrid position under federal law. Even so, the underlying supervisory logic is still instructive.

The CSA still prohibits marijuana outside of the terms of the newly promulgated Schedule III rule. The relevant question for Treasury, however, is not whether cannabis commerce is fully lawful. It is whether the assumptions underlying cannabis-specific SAR expectations still accurately reflect the federal enforcement posture towards qualifying medical cannabis activity.

Once qualifying state-licensed medical cannabis activity no longer carries the Schedule I status that shaped the 2014 guidance, FinCEN’s framework should shift from cannabis-specific, status-based reporting to ordinary risk-based monitoring. Updated guidance would represent an administrative correction acknowledging that the existing structure no longer reflects the legal and regulatory landscape it was designed to address.

Treasury Secretary Scott Bessent should issue updated FinCEN guidance stating that relationships with businesses operating under qualifying state-level medical cannabis licenses are not inherently suspicious merely because they involve cannabis transactions. The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve could then issue coordinated examination guidance aligned with Treasury’s position.

Banks would face reduced cannabis-specific compliance risk. For many institutions, the practical constraint is not merely formal legality but examiner uncertainty, reputational risk, and heightened scrutiny. Coordinated supervisory guidance would meaningfully reduce that uncertainty.

This administrative shift could also materially affect access to major U.S. equity exchanges. Exchange listing depends not only on exchange policy but also on the willingness of broker-dealers, clearing firms, custody banks, and other intermediaries to process and hold cannabis-related securities. If those intermediaries continue evaluating cannabis exposure through a default anti-money-laundering perspective, exchange eligibility will remain constrained. The real obstacle is not the policies of the major exchanges themselves, but compliance risks stemming from uncertainty in enforcement posture.

By shifting qualifying medical cannabis activity to ordinary risk-based monitoring, FinCEN guidance would significantly reduce compliance uncertainty surrounding custody and clearing relationships. That reduction materially improves conditions for plant-touching operators seeking to list on major U.S. exchanges.

Financial institutions would still apply ordinary standards under the Bank Secrecy Act and anti-money laundering laws, conduct customer due diligence, monitor transactions, evaluate ownership structures, and make institution-specific risk judgments. Questions involving co-located medical and adult-use operations would remain subject to ordinary risk-based review. Those issues, however, are standard supervisory and compliance questions. The current barrier is the categorical Schedule I overlay that treats cannabis status itself as a triggering compliance event. Removal of that barrier would reflect routine administrative housekeeping after a substantial change in the governing supervisory framework, accompanied by standard interagency coordination.

Markets can price commercial risk, but as recently evidenced, struggle to price regulatory uncertainty.

Because congressional action has been treated as necessary for so long, administrative actors have been hesitant to move, and that hesitation is then cited as evidence that Congress must act. Senate Banking Committee Chair Tim Scott argued that cannabis businesses still lack access to federal banking because “Congress is going to have to make it legal, because today even though the president has declassified it or reduced its impact, the truth is it is still illegal.” To insist on legislation based on the theory that cannabis remains unchanged for banking purposes despite rescheduling is to route a bundle of simple solutions through the most complicated available channel.

Congress can still enact a statutory safe harbor that provides long-term durability and reduces the risk of reversal by a future administration. Those are meaningful advantages. Durability, however, is distinct from authority. A statutory safe harbor may prove to be the best long-term solution, but it is no longer necessary.

Such action would require no new congressional authorization and no prolonged regulatory timeline. It requires only updated FinCEN guidance and interagency coordination to align prudential examination standards. Treating legislation as a prerequisite when Treasury possesses sufficient authority to act reflects a policy preference rather than a legal necessity. With billions in debt maturing, operators restructuring, and state-legal businesses still excluded from ordinary financial infrastructure, continued institutional delay is increasingly difficult to justify.