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June 2026 • Issue 26:06:02

Cannabis – plenty of interest but tough sell

Sherman told lawmakers that one of Flowhub's senior
engineers was denied a mortgage by a credit union in
January 2025 "simply because of the source of his income,"
nearly costing the employee's family the home they were
attempting to purchase.

In addition, the company said it has been "debanked
multiple times" despite operating as a federally legal
technology provider. In its written testimony, Flowhub
stated that the account closures caused "major business
disruptions, including nearly missing payroll, as we
scrambled to implement temporary stopgap solutions."

Flowhub further told lawmakers that some of its customers
are still forced to pay by money order because traditional
financial institutions refuse to provide basic depository
By Patti Murphy services to businesses associated with the cannabis sector.
Reclassification brings hope
he U.S. Department of Justice and the Drug
Enforcement Agency are taking a new stance on The Biden and Trump Administrations both took steps to
medical marijuana: they have scheduled hear- reclassify cannabis under the Controlled Substances Act.
T ings beginning June 29, 2026, to consider a "time- In August 2023, the Department of Health and Human
ly and legally compliant pathway" to federal legalization. Services recommended that cannabis be rescheduled
under the CSA, and the Drug Enforcement Administration
"There's definitely an appetite for this market," said Dee proposed a rule change in May 2024 that would do that.
Karawadra, president and CEO of Impact Pays. But ISOs
and agents eager to tap into the cannabis market—estimated The rule change, which elicited more than 42,000
to generate as much as $44 billion in yearly sales—continue comments, would apply only to state-licensed medical
to be forced to sell workarounds to traditional credit card
acceptance.

As it stands now, the card networks, along with many
banks and credit unions, continue to avoid businesses tied Contributed articles inside by:
to the cannabis industry because marijuana remains illegal
under federal law. The impact extends beyond dispensaries Allen Kopelman .....................................................................................16
to software and service providers, and even employees
working for legal ancillary businesses. Dee Karawadra ......................................................................................17
Jaki Kackert .............................................................................................26
In testimony submitted to the Senate Banking Committee
during a Feb. 5, 2025, hearing on debanking practices, Ken Musante ..........................................................................................28
Flowhub founder and CEO Kyle Sherman described the Joel Horwitz ...........................................................................................32
financial challenges facing his company. Flowhub develops
compliance and retail management software for state- Elie Y. Katz ...............................................................................................34
licensed cannabis dispensaries but does not sell cannabis
products directly. Jean-Philippe Niedergang ................................................................36
George Csahiouni ................................................................................38

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