Here’s the finding buried in this week’s GAO report that should stop you cold. Federal investigators went looking for cases where a bank got hit with civil or criminal penalties solely for serving marijuana businesses. They found none. Not from bank regulators, not in the cases they reviewed, not from the institutions banking cannabis today.
And yet some operators told GAO they’re paying $100,000 or more per year in banking fees.
That gap, between the risk nobody can document and the price everybody pays, is basically the whole story of cannabis right now. The industry has stopped waiting for permission. What it’s waiting for is institutional consistency, and this week showed how far away that still is. One part of the Republican-controlled federal government has moved medical cannabis toward Schedule III. Meanwhile the House Majority Leader is still calling marijuana a gateway drug. The Supreme Court may get pulled into deciding whether states can favor local cannabis owners. Convenience stores are lobbying Congress to keep hemp THC legal. And North Carolina is quietly designing a cannabis testing regime for a market it hasn’t legalized yet. Let me walk you through it.
The GAO found no bank ever punished for serving cannabis. The industry still pays like it’s radioactive.
This may be the most important cannabis-finance document Washington has produced. The Government Accountability Office examined the financial-services environment for state-licensed marijuana businesses, running focus groups and interviews with operators, banks, industry associations, and federal agencies. The verdict: accounts exist, but access is nowhere near normal.
Operators described account closures with little warning, high fees, weeks or months to open an account, and having to approach multiple institutions before finding one willing to onboard them. Participants in seven of eight focus groups reported monthly or annual fees, and two said their costs hit $100,000 or more per year. About 1,000 banks and credit unions filed FinCEN reports indicating cannabis relationships in 2024, which sounds like a lot until you compare it to the total universe of American financial institutions.
Then comes the striking part. Financial institutions repeatedly cited fear of adverse regulatory action, but GAO says federal banking regulators identified no enforcement actions taken solely because an institution served a cannabis business. The banking participants couldn’t name one either.
If nobody is actually being punished for banking cannabis, why does it cost like it is? Because the burden isn’t enforcement risk. It’s compliance labor, and banks price what they can measure.
FinCEN’s 2014 guidance requires ongoing monitoring and marijuana-specific suspicious activity reports, so a cannabis account demands far more compliance work than an ordinary middle-market business. More cost to monitor, higher fees. Unpredictable reputational risk, higher yield demanded. That’s why operators face higher rates, lower advance rates, shorter maturities, bigger equity requirements, and tougher covenants. And it explains why Schedule III won’t instantly fix this, because rescheduling improves tax treatment and reduces some criminal-law concerns without touching BSA obligations or internal bank policies. GAO notes some participants think safe-harbor legislation would bring more institutions in, while others say even that isn’t enough without broader legalization. That distinction is the whole ballgame: legal permission and economic willingness are different things. Banks may be allowed to serve cannabis. Boards still have to want the exposure.
🎯 The bottom line: The industry isn’t unbanked. It’s expensively and conditionally banked. Real normalization arrives when cannabis banking stops requiring a specialty business model at all.
The House Majority Leader still calls weed a gateway drug, while his own party reschedules it.
Federal marijuana policy is moving toward Schedule III. One of the most powerful Republicans in Congress is still using prohibition-era language. House Majority Leader Steve Scalise of Louisiana told Marijuana Moment he believes marijuana is a “gateway drug” that leads to additional problems, responding to questions about new FBI data showing Louisiana’s unusually high marijuana arrest activity. Marijuana Moment notes research has repeatedly found weak support for the causal gateway theory, with one recent study finding limited causal evidence and noting alcohol and tobacco typically precede cannabis in the progression of use.
Scientists can dispute the framing all they want, but Scalise isn’t a backbencher. He’s the majority leader, he helps set legislative priorities, and he represents the wing of the coalition that stays deeply skeptical of reform even as the administration moves the other way. Attorney General Todd Blanche’s April order reclassified certain state-licensed medical cannabis into Schedule III while DEA held its broader proceedings.
So one part of the Republican-controlled federal government says cannabis has accepted medical use sufficient for Schedule III. Another senior Republican says it’s a gateway drug. Both positions now live inside the same governing coalition.
For businesses, that contradiction has practical value as a warning: don’t underwrite federal reform as a straight line. Schedule III may improve taxes and expand registration, but political resistance still shapes banking legislation, appropriations riders, veterans policy, interstate commerce, federal workplace rules, and future agency guidance. Scalise has previously voted against legalization and opposed banking reform and amendments protecting state programs. His home state sharpens the contrast, since Louisiana just enacted the law allowing up to a year in jail for smoking within 2,000 feet of a school, and FBI data shows cannabis possession accounted for 62 percent of Louisiana’s drug arrests, the highest share in the dataset. States get to choose their own policies, but the inconsistency becomes glaring when patients, licensed operators, and federal registrants coexist with criminal penalties for ordinary possession.
🎯 The bottom line: Schedule III doesn’t mean the culture war ended. The federal rulebook is changing faster than federal politics, and political risk still belongs in your valuation.
The Supreme Court may soon decide who’s allowed to own a cannabis business.
The next big cannabis case at the Supreme Court may have nothing to do with whether marijuana is legal. It may decide who gets to own the businesses. A new Congressional Research Service report says disagreements among federal appeals courts have raised the odds the Court eventually reviews whether state cannabis laws favoring local residents violate the Dormant Commerce Clause.
The concept is simple: states generally can’t enact economic protectionism benefiting in-state businesses at the expense of out-of-state competitors. Cannabis complicates it because marijuana is federally illegal, which raises a genuinely weird question, how can the Constitution protect interstate commerce in a product Congress says can’t legally move interstate? Courts have split. The First Circuit struck down Maine’s residency requirement, and the Second Circuit has been skeptical of New York’s licensing preferences, both reasoning that federal illegality doesn’t erase Dormant Commerce Clause protection. The Ninth Circuit went the other way in Washington State and Sacramento cases, arguing courts should hesitate before using an implied doctrine to protect commerce federal law prohibits. That’s exactly the kind of split the Supreme Court resolves, and rescheduling makes it more live, since CRS notes lower-court analysis could shift as medical marijuana moves to Schedule III.
State cannabis markets were deliberately built as islands. Colorado weed stays in Colorado. Every state duplicates its own cultivation, processing, and retail infrastructure, which is exactly why production costs are so high.
If courts apply the Commerce Clause broadly, that ends. California and Oregon have enormous cultivation advantages, so high-cost states would face immediate price pressure, wholesale prices could converge nationally, cultivation licenses in expensive markets could lose value, and brands could finally scale across regions. Real estate changes too, since a cultivation facility worth something because a state requires in-state production is worth less when product can ship from Oregon. That’s not theoretical for lenders financing cultivation, they need to know whether the state protectionism underpinning their collateral is durable. Congress could intervene first, and CRS says lawmakers can explicitly permit or prohibit protectionist state rules. But that forces a real choice: protect social-equity and local ownership systems, or build a unified national market. Both have legitimate arguments, and you probably can’t maximize both forever.
🎯 The bottom line: The next great cannabis fight may be interstate commerce, and unlike legalization, this one destroys enterprise value in some places while creating it in others. Understand what a national market does to local license scarcity.
🗳️ 4. An Iowa Senate candidate is just straight-up saying legalize, regulate, tax.
Iowa’s Democratic Senate nominee Josh Turek isn’t proposing incremental reform. He wants federal legalization, regulation, and taxation, and he’s saying it openly on the trail. Turek, currently a state representative, told voters at an Iowa State football tailgate that marijuana’s Schedule I treatment is “ridiculous.” The exchange got personal when a voter described chronic pain and said she wanted gummies rather than opioids. Turek, who was born with spina bifida and uses a wheelchair, said he’s known people with disabilities who use cannabis for spasms and other symptoms, and contrasted marijuana’s risks with tobacco, alcohol, and opioids.
His opponent, Rep. Ashley Hinson, offers a clean contrast, having voted against legalization in 2022 while supporting cannabis banking legislation. That split mirrors an increasingly common Republican position: commercial reform without full legalization.
Turek’s going further, and his position acknowledges what rescheduling can’t fix. Schedule III improves tax treatment, facilitates research, and grants federal recognition. It does not create national recreational legality, permit ordinary interstate adult-use sales, eliminate every banking issue, or resolve the patchwork between legal and prohibition states.
Here’s the uncomfortable part for operators: federal legalization isn’t uniformly bullish for existing companies. State license scarcity creates artificial enterprise value, and a national market destroys that scarcity.
Legalization would unlock interstate commerce, national brands, bankruptcy protections, institutional finance, card processing, and broad M&A. It would also invite well-capitalized consumer brands in, push production toward low-cost regions, and squeeze independent dispensaries. Bullish for the industry’s size and legitimacy, potentially bearish for certain protected operators. The Iowa angle matters politically too, because this is a Midwestern state with a limited medical program and no recreational market, and Democratic gubernatorial candidate Rob Sand has also backed legalization using an alcohol-style regulation argument. Reform framed around tax revenue, medical access, personal freedom, and economic leakage rather than cannabis culture is simply more durable politics.
🎯 The bottom line: Federal legalization has moved from activist language into ordinary Senate campaign language. The biggest reform may come not because Washington got more progressive, but because legalization got too economically ordinary to justify the old architecture.
Convenience stores are now lobbying Congress to keep hemp THC legal.
The hemp fight has officially outgrown hemp companies. NACS, the convenience store association, is urging Congress to replace the scheduled federal crackdown with a regulatory system that lets adults keep buying legal hemp-derived THC. Their argument is refreshingly simple: convenience stores already know how to sell age-restricted products, they have age-verification procedures, and consumer demand is already substantial, especially for beverages.
That’s politically significant. A market defended only by cannabis companies is easy to paint as self-interested lobbying. A market defended by restaurants, convenience stores, alcohol distributors, farmers, retail chains, and consumers starts looking like a conventional commercial category. The National Restaurant Association has pushed for regulation over prohibition, Target has expanded hemp THC beverage sales, and alcohol interests are lobbying for federal beverage frameworks.
This creates a genuine competitive problem for traditional marijuana operators that I don’t think gets discussed enough. For years, dispensaries had one enormous structural advantage: if you wanted legal THC, you had to come to them.
Picture the casual consumer who doesn’t want flower, doesn’t want a vape, doesn’t identify as a “weed person,” and just wants a 5mg drink on Friday night. If they can grab it at Target or a liquor store, the dispensary vanishes from their buying journey entirely.
That could be one of the most consequential retail-channel shifts in cannabis history. Alcohol learned this decades ago, distribution availability often matters as much as product quality. Beverages may never be the biggest THC category by volume, but they could be the most normalized format, because a can looks familiar, the serving is measurable, consumption is social, and retailers already know how to age-gate it. For bankers, convenience-store adoption changes hemp underwriting entirely, since a beverage manufacturer selling into national retailers has purchase orders, distribution data, receivables, and CPG economics, which looks nothing like a cash-heavy dispensary. Regulatory risk stays the dominant variable until Congress writes durable rules, which is exactly why these retail groups are lobbying now. The market doesn’t need another temporary loophole. It needs standards.
🎯 The bottom line: The hemp THC market has stopped asking whether mainstream retail wants the category. Mainstream retail is now lobbying Congress to keep it, and that may matter more than cannabis-industry advocacy ever did.
Cannabis may help some eating disorders and hurt others, and that nuance is the point.
Cannabis and appetite have been linked in pop culture forever, but a new study suggests the medical picture is far more nuanced than “the munchies.” University of Sydney researchers surveyed more than 7,500 people across 76 countries with diagnosed or self-identified eating disorders, with over 3,000 reporting cannabis use in the prior year. Marijuana was widely perceived as beneficial among people with restrictive or food-avoidant disorders, including anorexia nervosa and ARFID. People with anorexia described reduced food-related anxiety and guilt alongside increased appetite, and ARFID patients reported better hunger recognition and less aversion around eating.
But the results were not uniformly positive, and that’s the important part. People with binge-eating disorder and bulimia reported lower efficacy ratings, and researchers noted THC’s appetite stimulation could theoretically worsen binge and purge patterns in some patients.
“Cannabis helps eating disorders” would be a misleading headline. Different disorders involve different mechanisms, and the same cannabinoid effect can be therapeutic in one condition and counterproductive in another. That’s how real medicine works.
The limitations are serious and worth stating plainly: this is observational, self-reported, with no random assignment, so it cannot establish that cannabis caused the improvements, and the authors themselves call for controlled trials. Dependence and adverse effects also matter, particularly since some of the most frequent users reported better outcomes, which could mean cannabis helped enough that they used it more, or could signal risks from daily long-term exposure. Both need study. Commercially, this could become significant, because eating disorders are a brutally difficult treatment category with expensive hospitalization and common psychiatric comorbidities. If specific formulations prove useful for food-related anxiety, nausea, appetite, or sensory aversion, that pushes cannabis further into behavioral health. But getting there requires standardized dose, defined formulations, THC-to-CBD ratios, patient selection, adverse-event monitoring, and measurable recovery outcomes. That’s the difference between a patient saying cannabis helps and an insurer paying for it.
🎯 The bottom line: The valuable lesson isn’t that cannabis “works” for eating disorders. It’s that different disorders respond very differently to the same effects, and that nuance is exactly what medical cannabis needs more of.
A Rhode Island farmer’s message to Washington: stop saying “unregulated hemp.”
Rhode Island hemp farmer Mike Simpson, co-founder of Lovewell Farms, has an argument Congress should hear before it rewrites the industry again. National rhetoric keeps treating the entire hemp industry as one lawless category, lumping convenience-store synthetics, full-spectrum CBD, regulated products, and agricultural cultivation together. They aren’t the same thing. Rhode Island already regulates consumable hemp with state licenses, testing requirements, potency standards, packaging and labeling rules, and age restrictions, controls Simpson says closely resemble the state’s medical cannabis system.
His concern is the federal framework tightening later this year, which generally excludes final hemp-derived products containing more than 0.4mg of total THC per container. That threshold reaches far beyond high-potency synthetic gummies.
A naturally extracted full-spectrum CBD product can be non-intoxicating, state compliant, naturally produced, and still exceed 0.4mg across the whole package. It was never the problem, and the rule kills it anyway.
Lawmakers are chasing real concerns, products marketed to kids, high-dose intoxicants, synthetic conversion, bad testing, unclear labeling, all of which deserve federal attention. But a rule designed around the wrong category destroys products that were never the target. And this is where lending risk gets unavoidable, because a Rhode Island farmer can follow every state rule, maintain strong compliance, build a brand, and generate positive cash flow, and then Congress changes one definition and the core product is commercially impaired. That’s regulatory concentration risk in its purest form. A banker examining hemp can no longer stop at “what’s revenue.” They need to ask which cannabinoids, how they’re produced, how much THC per serving and per container, whether conversion chemistry is involved, which federal definition applies after December, and how much revenue hangs on a single regulatory interpretation. Simpson is using Rhode Island’s attorney general race to force candidates to address exactly these distinctions, which is the level of specificity this policy area has been missing.
🎯 The bottom line: The federal debate keeps treating “hemp” as one product. It isn’t. Good regulation targets actual risk, not botanical ancestry, and Rhode Island already proves a state can tell the difference.
North Carolina is designing a cannabis market it hasn’t legalized yet, and that’s smart.
North Carolina is doing something unusual: asking the operational questions before opening the market. Marijuana remains illegal there for both recreational and medical use, yet the state already has a hemp sector estimated around $4 billion and 16,000 jobs. Lawmakers are debating how to regulate intoxicating hemp while simultaneously studying whether a marijuana framework might eventually make sense. When they return in November, House Bill 328 could be central, restricting hemp products above the 0.4mg threshold and barring hemp consumable sales including CBD to under-21s, with earlier action delayed partly over concerns about disrupting the hemp economy before the election. Meanwhile Governor Josh Stein’s advisory council is studying testing, potency, laboratory structure, consumer safety, and data transparency, while emphasizing legalization isn’t guaranteed.
Honestly, this is the right approach, because there are now nearly forty state experiments to learn from. THC inflation, slow licensing, testing bottlenecks, too few labs, excessive license scarcity, overtaxation, underregulated hemp, every one of those failures has a documented case study attached to it.
The testing piece is especially sharp. MCR Labs co-founder Yasha Kahn told officials that private labs face market pressure to report higher potency, since a cultivator whose product tests lower than competitors can simply shop for a lab with friendlier results. If the system permits that, THC labels stop meaning anything.
Potency drives wholesale price, retail price, brand perception, and inventory value. If reported potency can be manipulated, every financial statement built on that pricing gets less reliable too.
Kahn recommends public lab data and stronger state visibility, which is exactly the infrastructure banks should want, since transparent regulation makes cannabis underwriting easier. He also estimated a new accredited lab takes roughly nine to eighteen months to build, which illustrates the sequencing trap every new market falls into. You can’t issue cultivation licenses in January, require testing in March, and discover in April that no capable lab exists. Same logic applies across the board: don’t issue retail licenses without banking options, don’t approve patients without product, don’t encourage cultivation without processors, and don’t promise launch dates while the infrastructure is still theoretical.
🎯 The bottom line: North Carolina’s biggest advantage is arriving late. With forty experiments to study, repeating everyone else’s mistakes would be a choice, not an accident.
My Closing Thoughts
The GAO banking report should sit beside every federal cannabis proposal from here on, because it demonstrates something politicians keep missing. A business can be legal under state law, a bank can technically serve it, a regulator can confirm nobody has ever been punished for banking the sector, and the market can still be broken. Institutions respond to incentives, not press releases. When cannabis banking demands extra monitoring, more SAR filings, specialized compliance staff, board tolerance, and elevated reputational risk, banks price all of it. That’s why accounts cost six figures, why loans cost more, why fewer competitors enter, and why the industry stays financially abnormal even when technically banked.
That same pattern runs through every story today. The Supreme Court licensing fight isn’t really about marijuana, it’s about economic architecture, and if courts force markets open after rescheduling, decades of state policy assumptions vanish, creating winners in low-cost cultivation states and scalable brands while wrecking overvalued licenses and real estate built around mandated supply isolation. None of that fits inside the phrase “cannabis is becoming federally legal.” Convenience stores backing hemp THC isn’t a legalization story either, it’s a distribution story, and a 5mg drink sitting beside beer in an ordinary store may normalize cannabis faster than a thousand more dispensaries. Good for adoption, complicated for dispensary exclusivity. Iowa shows the political version, where “legalize it, regulate it, tax it” now sounds almost boring, and that ordinariness may be legalization’s sharpest weapon.
The medical and hemp stories point the same direction: specificity. Cannabis isn’t “good for eating disorders,” it may help restrictive and food-avoidant ones while potentially hurting binge-type disorders, and that distinction is more credible than any broad claim. Same with hemp, where “which hemp?” is the only question that produces workable rules. And North Carolina may hold the smartest position in the whole edition, studying labs, testing, and transparency before legalizing anything, which is what everyone else should have done first. America already knows people consume cannabis, businesses build around demand, banks will serve the sector when the economics work, and consumers will buy low-dose THC outside dispensaries when the law allows. None of that is theoretical anymore. Cannabis spent decades asking government for permission. The question now is whether government, and the industry, can build institutions sophisticated enough to handle what permission created.
That’s what this newsletter is for.
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