Feb 26, 2025
Since the start of the new presidential administration, a cloud of uncertainty has shrouded the legal cannabis community regarding regulatory and legal issues. Although the Senate Banking Committee, recently called to end debanking practices against cannabis businesses, which would allow them to work with traditional banks, experts believe the current Senate is unlikely to pass any significant cannabis reform. For instance, Senators James Lankford (R-OK) and Pete Ricketts (R-NE) recently introduced the “No Deductions for Marijuana Businesses Act,” which aims to block cannabis companies from filing tax reductions under IRS code 280E, even in the event of a rescheduling for the substance.
Despite the slowdown in federal marijuana reforms, states are continuing to drive forward their own initiatives. New York State regulators released a new directory for connecting licensed marijuana businesses with banks willing to work with them. And, North Carolina lawmakers are likely to pass House Bill 2485 in the coming weeks, creating a regulated and taxed cannabis marketplace in the region.
Recently, Jonathan Robbins, chair of the cannabis practice at law firm Akerman LLP, took a break from his schedule to share his insights on how cannabis businesses can move forward as the federal governments and various state form different legal frameworks.
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This Q&A has been edited for conciseness and clarity.
Iris Dorbian: What are national banking concerns that current and potential laws present to cannabis businesses?
Jonathan Robbins: Even though 39 states have legalized cannabis for medical use and 24 states permit adult-use, access to traditional financial services remains a challenge for the industry. Several banks throughout the country will work with the industry in some capacity, but most will not work with anyone even remotely associated with cannabis. This creates issues for operators and even ancillary services providers, as they must face the security concerns of an all-cash business. In many instances, [they]
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pay significantly higher fees and interest to work with private lenders.
For years, there has been bipartisan support for banking reform, but proposed legislation, including the SAFE Banking Act and the SAFER Banking Act, have never made it out of committee. While we have gotten friendly signals from our new administration, it remains to be seen if banking reform will become a reality soon.
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Dorbian: What specific regions in the U.S. are the most favorable and unfavorable to cannabis companies?
Robbins: The Western states - California, Oregon, Washington--have historically been the most cannabis-friendly states, with liberal adult-use programs that have evolved over time to meet the needs of the industry and protect consumers. I would include Nevada, Michigan, Illinois and Massachusetts in that group. These more mature markets have developed well-reasoned and uniform regulatory regimes.
Moving up the list quickly are Ohio, Missouri, Maryland, New York and New Jersey.
On the other hand, Idaho, Kansas, Wyoming, South Carolina, Nebraska and North Carolina remain prohibitionist states with efforts at legalization for either medical or adult-use failing to make it across the finish line.
Indiana, Iowa, Kentucky, Georgia, Tennessee, Texas and Wisconsin fall somewhere in the middle with medical programs that, for all practical purposes, permit CBD oil only.
Dorbian: What are bills and regulations that the industry should be monitoring?
Robbins: The most prominent discussion currently revolves around the rescheduling of marijuana from Schedule I to Schedule III under the Controlled Substances Act. This was proposed by the Biden administration and the Department of Justice, supported by the Department of Health and Human Services. While the Drug Enforcement Administration (DEA) was charged with the responsibility to hold public hearings on the issue, those efforts have stalled, and it is uncertain what will happen in the current administration. Interestingly, the most significant benefit of rescheduling would be relief from the burdens of IRS Code Provision 280E, which effectively imposes draconian tax burdens on the industry. Two U.S. Senators introduced a bill this month to prevent licensed cannabis businesses from tax relief even in the event of rescheduling. It is anticipated that this bill will not be successful, but it certainly creates trepidation with respect to what we can expect for the industry over the next several years.
Dorbian: What are your broader predictions on trends throughout the sector this year?
Robbins: In general, we remain extremely bullish on the cannabis industry. Here are some of my predictions:
*Perhaps not this year, but I do anticipate that rescheduling will occur;
*Many believe that President Trump will be a very friendly president to the industry. This is a major departure from his previous stance but note that he supported Florida’s failed effort for adult-use in 2024. We anticipate that he will continue to push this as a states’ issue;
*Florida will put another adult-use initiative on the ballot for 2026;
*There will be increased regulation or outright bans on intoxicating hemp-derived products;
*Keep an eye on Pennsylvania, North Dakota and South Dakota; and,
*Hopefully, Congress will continue to focus on banking reform.
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