Pot Inc. is gearing up to lobby the Trump administration, claiming that Wall Street is hindering an executive order that aims to classify marijuana as a medicinal drug, according to On the Money.
According to the Post, officials from large banks like JPMorgan, Bank of America, and Citigroup believe that Trump’s plan to “reclassify” marijuana from a Schedule 1 drug—alongside heroin—to a Schedule 3 drug, akin to Tylenol with codeine, doesn’t provide them with enough authority to support the marijuana industry financially.
The bankers are particularly focused on the fact that the executive order mainly addresses medical marijuana, leaving out more lucrative recreational uses like smoking or consuming high-THC gummies. They argue that this gap is crucial for them.
Because of this, they’re telling cannabis entrepreneurs that they’re unable to provide vital services such as loans or credit card transactions.
A memo from JPMorgan, which was accessed by On the Money, included a statement from a bank executive saying that “the feedback I have received indicates it’s too early to reconsider our stance, and we won’t change it until marijuana is officially classified as a Schedule III drug and the law is updated.”
Trump signed the executive order on December 18, but it still needs final approval from Attorney General Pam Bondi, who has yet to act on it. Bondi, during her time in the Florida Legislature, had opposed the legalization of marijuana, while most other states have been softening their marijuana regulations.
Insiders familiar with the policies of the NYSE and Nasdaq indicate that their internal guidelines still prevent U.S. cannabis companies from being listed for domestic trading.
While many Canadian pot firms are listed on the Nasdaq, that’s mainly because they’re outside the U.S. and don’t sell their products domestically.
Mark Cohodes, a former hedge fund manager and supporter of President Trump, has expressed dissatisfaction. He believes the major banks are misinterpreting the intent of Trump’s ruling and plans to convey this message to White House officials soon.
Cohodes pointed out comments by Dr. Mehmet Oz, who leads the White House’s Centers for Medicare and Medicaid Services, which came after the president’s rollout of a provision allowing medical marijuana under Medicare and Medicaid programs.
“The medical market Dr. Oz mentioned is expanding by $35 billion, and CMS isn’t paying these companies upfront in cash. Someone has to provide medical creams to the government. This necessitates funding,” Cohodes added.
Requests for comments from JPMorgan, Nasdaq, and the New York Stock Exchange were not returned. The White House also had no immediate reply.
Cohodes remarked, “President Trump wants to support the financial industry, so it will adapt whether they like it or not. Why shouldn’t an industry that produces medical products covered by Medicaid and Medicare be able to access banking?”
He also mentioned, “Trump dislikes the notion that American pot companies, which hire U.S. workers and pay taxes, can’t be publicly traded while Canadian firms can.”
The marijuana industry is valued at around $60 billion, and advocates like Cohodes have high hopes that placing it in a federal subcategory will lead to significant growth in dispensaries, farms, and various cannabis products. Without federal approval, marijuana companies continue to face considerable challenges in expanding their operations due to banking regulations from Washington.
