The Trump administration’s decision to reclassify marijuana as a less dangerous drug marks a milestone for the cannabis industry, but experts and executives say it falls well short of ending the sector’s longstanding exile from the mainstream financial system.

Acting Attorney General Todd Blanche signed an order Thursday moving cannabis from Schedule I, where it has sat alongside heroin and LSD since 1970,  to Schedule III, which covers regulated pharmaceuticals such as anabolic steroids and Tylenol with codeine. The order applies immediately to FDA-approved products and state-regulated medical marijuana, with a broader rescheduling hearing set for June 29, according to a report by the American Banker.

The most immediate financial relief comes on taxes. Because Section 280E of the Internal Revenue Code bars companies trafficking Schedule I and II substances from taking standard business deductions, the reclassification will for the first time allow state-licensed medical cannabis companies to deduct operating expenses on their federal returns, The Wall Street Journal reported. The change is expected to materially improve cash flow, margins, and lending eligibility, the newspaper said. 

But the banking picture is more complicated.

Cannabis remains a controlled substance, meaning money tied to its sale could still technically constitute a form of money laundering under the Bank Secrecy Act, the Journal noted. Credit card giants Visa and Mastercard are not expected to immediately begin processing cannabis transactions, and banks must still file suspicious activity reports on cannabis-related deposits as directed under federal guidance. 

“Rescheduling won’t simply give banking a green light,” Kevin Hart, CEO of Green Check, a fintech specializing in cannabis banking compliance, told both the Journal and the Banker. “In fact, it will usher in new and likely more complex rules and regulatory expectations for both cannabis businesses and financial institutions.”

Terry Mendez, CEO of cannabis compliance firm Safe Harbor Financial, called the move “the most significant federal action on cannabis policy in more than fifty years,” while cautioning that it “does not change existing obligations under the Bank Secrecy Act,” the American Banker reported. Still, Mendez said he expects the action to “drive increased interest from banks and credit unions” as perceived risk from federal agencies moderates.

That shift in perception may matter as much as the legal change itself. The legal conflict between state and federal cannabis law has long been the primary reason banks shun the industry, said Amiyatosh Purnanandam, a finance professor at the University of Texas at Austin, in an interview with NBC News last year. “Banks don’t want to deal with the conflict,” he said, adding that barriers around legal uncertainty, collateral valuation, and suspicious activity reporting “likely will come down after the reclassification.”

The cash-only reality has imposed real costs on the industry. Elad Kohen, founder and CEO of The Flowery, which operates 26 cannabis stores across Florida and New York, told NBC his business cannot process credit or debit card payments, forcing it to deal in paper cash. “You’re dealing with paper, which makes you a target” for crime, he said.

The reclassification does not extend to recreational cannabis, does not legalize marijuana federally, and provides no retroactive tax relief, the American Banker noted.