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Banking and Restructuring Controlled Substance Act Interviews Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Cannabis Rescheduling: Will the Vault for Cannabis Banking and Financial Services Finally Be Opened?

Scott H. Moskol and Lauren Medeiros Forster —

Whether you are a cannabis operator, lender, or investor, you have probably been hearing a lot of buzz about the potential rescheduling of cannabis from Schedule I to Schedule III under the federal Controlled Substances Act, especially following President Trump’s recent executive order directing federal agencies to initiate the process of rescheduling marijuana and reviewing related regulations. It is an exciting development, and there is plenty of reason for optimism, but let’s take a look at what this shift could change (and likely not change) when it comes to banking, lending, and financial services in cannabis.

  1. The Banking Landscape: Evolution, Not Revolution

It is likely that rescheduling cannabis to Schedule III will not dramatically change what banks are presently required to do under the Bank Secrecy Act (the “BSA”) and the 2014  FinCEN guidance on banking marijuana-related businesses. These BSA-related compliance obligations (i.e., the enhanced due diligence, suspicious activity reporting, and monitoring requirements) will not vanish as a result of rescheduling. Banks will still need to navigate a complex regulatory and compliance environment, and if you are a financial institution already working with cannabis operators or you are a cannabis business already working with a financial institution, your day-to-day relationship will not change.

What the industry is hoping for, however, is that rescheduling will prompt federal regulators to issue amended or entirely new guidance on how banks can engage with the cannabis industry. That kind of updated regulatory framework could open doors to more streamlined processes and potentially reduce some of the friction that has defined cannabis banking for years but more importantly bring in new financial institutions providing banking and lending services to the industry. Eyes should be kept on Treasury and the banking regulators—their next moves will matter once cannabis is rescheduled.

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Controlled Substance Act Legislation Meet Blank Rome Regulatory Compliance

2025 Wrap-Up: Historic Cannabis Rescheduling

Blank Rome’s Cannabis Practice Applauds Milestone EO and Anticipates Continued Developments and Opportunities in 2026

Frank A. Segall and Shane A. Pennington —

President Trump recently signed Executive Order “Increasing Medical Marijuana and Cannabidiol Research,” published on December 18, 2025. This important measure directed federal agencies to reclassify cannabis from Schedule 1 to Schedule 3 under federal law, marking a major step forward for medical research, patient access, and the broader cannabis industry.

In recognition of this milestone, we would also like to acknowledge entrepreneur and philanthropist, Howard Kessler, for his visionary leadership and commitment to expanding medical cannabis access for seniors through The Commonwealth Project, which aligns with this significant occasion.

“We congratulate Howard Kessler on his vision, perseverance, and critical involvement in advancing medical cannabis access for senior healthcare through The Commonwealth Project, which resulted in President Trump’s historic Executive Order rescheduling cannabis from Schedule 1 to Schedule 3. Howard Kessler championed a cause and became its champion,” said Frank A. Segall, partner and co-chair of the Cannabis practice.

Following this Executive Order, Blank Rome’s Cannabis team has been actively engaging with the media, providing insights and analysis on the implications of rescheduling cannabis.

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Controlled Substance Act Legislation Meet Blank Rome Regulatory Compliance

Blank Rome Poised to Guide Clients Through Marijuana Rescheduling

Shane A. Pennington, Frank A. Segall, and Scott H. Moskol —

As the cannabis industry anticipates a significant executive order that could reschedule marijuana from Schedule I to Schedule III, Blank Rome’s Cannabis industry group is ready to guide clients with strategic insight and timely advice. Regulatory authority and Blank Rome partner Shane A. Pennington, with the support of Cannabis industry group co-chairs Frank A. Segall and Scott H. Moskol, have been directly involved in addressing the Department of Justice’s proposal for rescheduling marijuana on behalf of our clients. Encouraging updates continue to emerge daily, and we believe an executive order authorizing this change will be issued soon.

Shane, Frank, Scott, and Blank Rome’s team of cannabis attorneys are at the cutting edge of industry trends, closely following and influencing policy developments in Washington, D.C. The Cannabis industry group is dedicated to keeping our clients updated in real time, helping you act swiftly and take advantage of new possibilities arising from this historic development.

Once a clear path is set by executive order, our team will host a series of meetings and webinars to help clients navigate the evolving regulatory landscape and maximize the benefits of rescheduling. Building on our longstanding leadership at the forefront of the cannabis industry, our deep knowledge of legal and regulatory issues enables us to guide clients through emerging changes, so they can confidently navigate and benefit from the evolving market.

As you prepare for this transformative moment in the industry, trust Blank Rome to be your partner every step of the way. For questions or to learn more about our services, please contact us.

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Banking and Restructuring Controlled Substance Act Interviews Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Closing the Hemp Loophole: What Monday’s Farm Bill Update Means for Delta-8 and Hemp-Derived THC

Marc A. Polito —

At Blank Rome’s 9th Annual State of the Cannabis Industry Conference, Frank A. Segall, partner and co-chair of the firm’s Cannabis practice, asked a panel—including Joseph Andreae, CEO of CULTA, Jared Maloof, CEO of Standard Wellness, Ed Schmults, CEO of Firelands Scientific, and Jim Scott, CEO of Statehouse Holdings—what is the number one issue confronting the cannabis industry today? All four chief executives unanimously echoed the same sentiment: the number one issue confronting state-regulated cannabis operators today is the unregulated hemp market, which has become a growing thorn in their sides as the hemp market picked up steam over the past few years. Well, with new action by lawmakers yesterday, it appears this issue is on the brink of being resolved!

Over the past six years, the hemp industry has transformed from a niche agricultural sector into a national marketplace for diverse cannabinoid products. That transformation was catalyzed by the 2018 Farm Bill, which legalized hemp by defining it as cannabis with no more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. What resulted from this was an unintended market: intoxicating hemp-derived cannabinoids such as delta-8 THC, delta-10 THC, and other analogs produced from cannabidiol (“CBD”) isolates through chemical conversion. The “hemp loophole,” as it came to be known, allowed psychoactive products to proliferate in convenience stores, restaurants, and online and circumvented the strict controls applied to state-licensed cannabis.

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Controlled Substance Act Legislation Meet Blank Rome Regulatory Compliance

Federal Marijuana Rescheduling Effort Challenged in Congress

Marc A. Polito —

Where Things Stand Now

Last week, Republican lawmakers in Congress took a major step to block President Donald Trump’s potential move to reschedule marijuana. The GOP-controlled House Appropriations Committee approved a spending bill that would prohibit the Department of Justice (the “DOJ”) from using federal funds to reschedule or deschedule marijuana under the Controlled Substances Act. This move comes as the Trump administration signals it is considering reclassifying cannabis from Schedule I to Schedule III, a change that would have significant implications for the industry and for federal-state relations.

The bill, advanced by the House Appropriations Committee, includes explicit language: “None of the funds appropriated or otherwise made available by this Act may be used to reschedule marijuana… or to remove marijuana from the schedules established under section 202 of the Controlled Substances Act.” This provision, if enacted, would effectively freeze the ongoing federal review process and reserve the authority to change marijuana’s status exclusively for Congress, rather than the executive branch.

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Banking and Restructuring Controlled Substance Act Employment Issues Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Turning Over a New Leaf: How Cannabis Receiverships Can Cultivate a Stronger Future

Lauren Medeiros Forster —

It is no secret that the cannabis industry has been on a wild ride lately, especially in mature markets. Many operators are feeling the pressure, and they are not alone. Let us break down the current landscape, why it is tough out there, and how receiverships and distressed sales might actually be a positive move for struggling cannabis companies.

Many developed cannabis markets are facing serious challenges. Inflation and a shaky economy are making it harder for businesses to stay afloat (regardless of industry type), on top of market saturation that has caused cannabis prices to drop, and tight profit margins for businesses in the more established marijuana states. This is compounded with the harsh effects of tax burdens due to 280E—where cannabis companies are unable to deduct otherwise established business expenses from gross income as a result of the federal illegality of cannabis in the United States—and lack of liquidity from inability to access traditional debt financing and institutional equity markets. As a result, many cannabis companies are finding it difficult to pay their debts and keep the lights on. And because cannabis is still federally illegal in the United States, struggling cannabis operators are limited when it comes to utilizing federal bankruptcy mechanisms for relief.

But hope is not lost. Even in tough times, cannabis businesses along with their management, creditors, and investors, have found options to help their companies restructure and move forward. One of those is a state-level receivership.

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Controlled Substance Act Employment Issues Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Welcome to Cannabis Industry Insights

Frank A. Segall, Scott H. Moskol, and Max M. Borg —

Whether you are a plant-touching operator or an ancillary business, lender, or investor, Blank Rome’s Cannabis Industry Insights blog is your go-to resource for the cannabis industry.

Authored by our trailblazing Cannabis practice attorneys, the Cannabis Industry Insights blog explores the rapidly evolving legal, regulatory, and business landscape, helping those in the sector stay ahead of the curve and seize industry opportunities. Our cannabis team was one of the first in the United States to utilize its extensive corporate and finance experience to support the cannabis industry, and has received numerous accolades, including Law360’s prestigious 2023 Cannabis Practice Group of the Year.

Through our blog, we will continue to explore issues that directly impact the cannabis industry. With the announcement of the rescheduling of cannabis from Schedule 1 to Schedule 3 under the Controlled Substance Act, we are optimistic about new and expanding opportunities for industry players. In addition to interviews with industry leaders, the blog will cover such topics as the impact of rescheduling on 280E taxation; legal and regulatory compliance concerns; the landscape for mergers and acquisitions; legislative efforts; banking, insurance, and other business issues; capital markets; workouts and restructurings impacting the industry; the growing importance of e-commerce, fintech, and regtech; debt and equity financings; labor and employment issues in light of unionization efforts; data privacy and security; and employee stock ownership plans (“ESOPs”); among other areas that are relevant to the underpinnings of the industry.

Our goal is to help cannabis businesses survive and thrive in this highly regulated environment, as well as to assist new participants in entering this exciting industry. Subscribe below to receive our timely content:

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