Pot Inc. is gearing up to lobby the Trump administration – and press its case that the president’s executive order declaring marijuana a drug useful for medical purposes is being thwarted by Wall Street, On The Money has learned.
As reported by The Post, people at big banks – JPMorgan, Bank of America and Citigroup – have said the Trump executive order “reclassifying” pot from its previous heroin-like Schedule 1 level to a so-called Schedule 3 drug like Tylenol with codeine stops short of giving them the authority to “bank” the marijuana industry.
Specifically, the bankers have argued that Pot Inc.’s far-bigger prospective business – recreational use that would include the smoking of joints and ingesting high-inducing gummies – wasn’t specifically addressed by the president’s edict, which instead focused on medical uses.
Accordingly, bankers have pleaded to pot entrepreneurs that their hands are tied and remain unwilling to provide crucial services such as lending and credit card transactions.
According to a JP Morgan memo obtained by On The Money, a top executive at the bank told one potential pot client that “The feedback I’ve received is that it’s still too early to reconsider our position, and we will not change our stance until it is formally classified as a Schedule III drug and the law changes.”
Trump signed the pot EO on Dec. 18, but to fully implement it, US Attorney General Pam Bondi needs to finalize the order, which she has not. As AG of Florida, Bondi opposed pot legalization, even as most other states have moved to loosen marijuana laws.
Meanwhile, people familiar with policies of the two major US stock exchanges, the NYSE and Nasdaq, say their internal rules still prevent the “listing” of US marijuana companies to trade domestically.
Nasdaq lists a number of Canada-based pot companies but only because they’re domiciled outside the US and don’t sell their product domestically.
Pot Inc., isn’t happy. Marc Cohodes, a former hedge fund manager and investor in cannabis related businesses, had been a leading advocate of the Trump EO and says the big banks are now violating the spirit of Trump’s ruling, a point he will make to White House officials imminently.
Cohodes claims the banks are misreading the Trump EO. Cohodes pointed to the comments of Dr. Mehmet Oz, administrator of the White House’s Centers for Medicare and Medicaid Services after Trump issued his EO, which opened medical marijuana for to be supplied by the government through Medicare and Medicaid programs.
“The medical market Dr Oz spoke about is an incremental $35 Billion and last I looked CMS doesn’t pay business up front in cash. Someone is going to supply the government with medical creams, which means this industry needs to be banked,” Cohodes added.
Press officials at JP Morgan, Nasdaq and NYSE declined requests for comment. A White House press rep had no immediate comment.
“The industry is going to be banked whether they want to or not because Trump wants it to be banked,” Cohodes tells On The Money. “How can an industry producing a product that has medical usage and has a product eligible for Medicaid and Medicare, not be banked?”
Cohodes likewise claims that “Trump hates the fact that US pot companies employing US workers, paying US taxes can’t get listed on any exchange but Canadian companies can.”
Pot Inc. is a $60 billion industry, and its top players and advocates like Chodes believed putting the drug in a low-level federal category would lead to an explosion of growth for dispensaries, farms and various weed-related products.
Without federal buy-in on Pot Inc., marijuana companies face significant hurdles in their planned expansion since banking services are regulated in Washington.
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