Schedule III 'Doesn't Do Much For Banking': What's Next For Cannabis Financial Access?

Tyler Beuerlein, chief strategic business development officer at Safe Harbor Financial, recently outlined the ongoing challenges and solutions within cannabis banking in an exclusive interview with Benzinga. Operating across state-legal markets and Puerto Rico, Safe Harbor aims to provide compliant financial services for cannabis businesses navigating complex regulatory environments.

Streamlining Cannabis Banking Services

As cannabis businesses expand nationally, Beuerlein explained, financial needs grow in complexity. Safe Harbor’s model aims to streamline these requirements, often consolidating numerous banking relationships into a single service. “We have a unique ability to streamline all of those into one relationship, save operators a significant amount of money, and then we're lending,” he stated, noting that few institutions currently lend in this space.

With Safe Harbor's services, cannabis operators can minimize expenses and gain easier access to lending, helping them better navigate an industry still hindered by limited financial options.

Federal Rescheduling and Its Impact on Banking

With the potential rescheduling of cannabis from a Schedule I to a Schedule III substance, Beuerlein commented on the possible impacts this might have on cannabis banking. While rescheduling could remove certain tax burdens like Section 280E, Beuerlein emphasized that banking oversight may remain unchanged. “Schedule III doesn't do much from a banking or regulatory oversight perspective," he said, highlighting that financial access improvements would likely be limited, aside from increased deposits.

For Safe Harbor and other cannabis-focused financial services, rescheduling could create additional opportunities to support cannabis clients through lending, as operators potentially realize more revenue due to tax savings.

Federal Legalization: Expectations and Realities

Looking toward federal legalization, Beuerlein urged caution, reflecting on promises from past administrations that failed to materialize. He noted that similar industries remain underserved despite federal legality, mainly due to regulatory compliance and risk management complexities.

"We have been promised things for years and years… I approach statements like that cautiously, and I would advise everyone else to do the same," he stated, advising the industry to keep expectations realistic.

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Cannabis banking illustration via Shutterstock.