Why The Fed’s Rate Pause Matters Less To Cannabis Than 280E And Banking Limits

By Javier Hasse, Co-Founder & Editorial Advisor

The Federal Reserve held interest rates steady at its January policy meeting, a move widely expected by markets as policymakers continue to balance easing inflation against a still-resilient labor market.

The decision keeps borrowing costs unchanged after a series of rate cuts in late 2025 and signals a more cautious, data-dependent approach from the central bank as it evaluates the next phase of monetary policy. While some businesses had hoped for additional relief in the form of lower rates, the Fed’s posture suggests policymakers are in no rush to move aggressively in either direction.

For cannabis operators and investors, however, the impact of the Fed’s decision is muted by broader structural challenges that continue to shape the industry’s capital landscape.

Anthony Coniglio, CEO of NewLake Capital Partners (OTCQX: NLCP), said the absence of a rate cut is far from the most pressing issue facing cannabis businesses.

“The Federal Reserve’s decision to hold interest rates was widely expected by market participants and reflects recent economic data which suggests a balance of risks between employment and inflation,” Coniglio said in a statement shared with IgniteIt. “While the absence of a rate cut may be disappointing for those operators hoping to reduce interest expense, the bias toward steady or lower rates should reassure them that higher borrowing costs is off the table for now.”

Coniglio emphasized that access to capital in cannabis remains constrained by factors largely unrelated to monetary policy.

“Frankly, the lack of a rate cut is the least of cannabis operator problems since structural challenges continue to constrain access to capital for the industry,” he said, pointing to high effective tax burdens under IRS code 280E, limited access to traditional banking services and ongoing refinancing pressures. “Even without additional tightening, these factors continue to drive risk pricing and capital selectivity.”

According to Coniglio, meaningful improvement in financing conditions will depend less on interest-rate policy and more on progress at the federal level, including rescheduling, tax normalization and expanded access to mainstream banking.

“Until then, operators will continue to rely on disciplined balance-sheet management and operational efficiency,” he said. “At NewLake, we remain focused on supporting well-capitalized operators and deploying capital prudently as the market continues to mature.”

While the Fed’s decision provides some reassurance that borrowing costs are unlikely to rise in the near term, cannabis operators continue to navigate a capital environment shaped primarily by regulation, taxation and access — challenges that monetary policy alone cannot resolve.

Photo by Etienne Martin on Unsplash