Joe Biden, the President of the United States, through an executive order Thursday, pardoned convicts of simple marijuana possession. The president’s order, which will only apply to convicts within the District of Columbia (DC), signals a change in approach to marijuana that has been long coming. Through this, the Biden administration fulfilled a campaign promise ahead of the November midterms. 

“Sending people to prison for possessing marijuana has upended many lives and incarcerated people for conduct that many states no longer prohibit,” Biden said in a statement issued from the White House. “Criminal records for marijuana possession have also imposed needless barriers to employment, housing and educational opportunities,” the president’s statement read. 

Also Read | Elias Theodorou: First athlete to be prescribed medical marijuana

As part of the executive order, Biden further said that he has asked Merrick Garland, the attorney general, to take a look at the regulations governing marijuna, including if it should remain classified under a Schedule 1 substance under federal law. Schedule 1 drugs are recognised as substances with no currently accepted medical use and high potential for abuse. 

The challenge for ganja capitalism 

Marijuana companies have been struggling to obtain money to fund operations for some time now. This is because most cannabis companies cannot go to federally chartered banks for loans. Federally chartered banks don’t give out loans to fund Schedule 1 drugs.  

Consequently, marijuana companies have to depend on state-chartered banks and credit unions. They are also unable to accept credit cards and process payments. A re-examination of marijuana as a Schedule 1 drug could also pave the way for the passage of the SAFE Banking Act. 

Also Read | Biden to pardon simple marijuana possession convicts

The SAFE Act, or the Secure and Fair Enforcement Act, is a proposed legislation that will generally prohibit a banking regulator from penalising a depository institution for providing banking services to a legitimate cannabis-related business. 

“This is massive,” said Karan Wadhera, managing partner of cannabis-focussed venture capital firm Verde Capital, speaking to Axios. He said this will help both from a social equity and a business perspective.