The Biden administration’s move to reclassify marijuana as a less dangerous but still controlled drug was hailed as a monumental step in reshaping national policy. But it might do little to ease a longstanding problem in the cannabis industry—a lack of loans, checking accounts and banking services that other businesses take for granted.

“As far as financial institutions, I don’t necessarily think it’s going to have a demonstrable effect” on how they deal with cannabis operators, said Morgan Fox, political director for the National Organization for the Reform of Marijuana Laws, or NORML.

Similarly, a banking trade group expected no shift in the legal landscape with the proposed change.

“Any potential decision from the administration to reclassify cannabis has no bearing on the legal issues around banking cannabis,” said Blair Bernstein, a spokesperson for the American Bankers Association. “Cannabis would still be illegal under federal law, and that is a line many banks in this country will not cross.”

Most Americans live in states where marijuana is legally available in some form.

But there’s a continuing problem when it comes to banks: Many financial institutions don’t want anything to do with money from the cannabis industry for fear it could expose them to legal trouble from the federal government, which still lists marijuana as illegal.

That conflict has left many growers and sellers in the burgeoning industry in a legal conundrum in which they are shut out of everyday financial services like opening a bank account or obtaining a credit card. It also has forced many businesses to operate only in cash—sometimes vast amounts—making them ripe targets for crime.

The U.S. Drug Enforcement Administration’s plan would move marijuana from its current classification as a Schedule I drug, alongside heroin and LSD, to a Schedule III drug, alongside ketamine and some anabolic steroids. The plan, which was confirmed to The Associated Press on Tuesday by five people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive regulatory review, follows a recommendation from the federal Health and Human Services Department.

Schedule III drugs are subject to various rules that allow for some medical uses, and for federal criminal prosecution of anyone who traffics in the drugs without permission.

It could take months for the proposal to wind through a series of regulatory hurdles in Washington. The election-year push could help steady Biden’s shaky popularity, especially with younger voters who tend to have a more welcoming view of marijuana use.

The lack of banking services has created a fear-inducing ritual for many operators, who are forced to travel with large sums of cash to make tax payments.

Proposals that would allow banks to handle marijuana funds without the risk of federal prosecution have stalled in Congress for years.

Rescheduling might make some banks more willing to consider doing business with cannabis firms, said Julie A. Hill, a professor at the University of Alabama School of Law. But even then, they would face costly regulatory requirements to vet funds coming from the industry—because the federal government lists cannabis as illegal, every marijuana-related transaction is considered suspicious, Hill said in an email.

“Cannabis is still an emerging market with a lot of credit risk,” Hill added. Even with rescheduling “cannabis companies should expect that banking services will still be expensive.”

That was echoed by Dotan Y. Melech, CEO of cannabis credit rating agency CTrust, who said, “The reality is that current lending practices are unlikely to change without better understanding cannabis risk.”

A Congressional Research Service report last year said about 675 financial institutions—a fraction of the banking industry—are doing business with cannabis companies. The nonpartisan agency also noted that “the depth and breadth of financial services that depository institutions are providing to marijuana businesses is unclear.”

Adam Goers, senior vice president of multistate operator The Cannabist Company, who chairs the industry group Coalition for Cannabis Scheduling Reform, called the administration’s proposal a historic step that would open the way for research and much-needed tax changes that would benefit operators.

A perfect companion, he said, would be the latest version of a banking bill pending in Congress, the so-called SAFER Banking Act that would allow banks to provide services to the cannabis industry in those states where it’s legal.

Without the bill, it’s not clear if more banks will enter the cannabis marketplace, he said.

Morgan Paxhia, co-founder of Poseidon Investment Management, called rescheduling “a crucial move towards federal legalization” that would encourage investment.

“We anticipate a surge in liquidity as sidelined capital enters the market, drawn by the potential for legal businesses to thrive,” Paxhia said in a statement.

—Michael R. Blood, Associated Press