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Cannabis Banking Protections Removed from Federal Spending Bill

19 June 2024 / Category: Blog

House Republicans have recently removed a key provision protecting cannabis banking from a federal spending bill. This decision came just ten days after the bill passed a House of Representatives subcommittee.

Original Banking Protections

Financial Services and General Government Appropriations Act

The previous version of the Financial Services and General Government Appropriations Act aimed to prevent federal agencies from penalizing financial institutions that provide services to marijuana and hemp businesses. This provision was crucial for the cannabis industry, which has long struggled with banking access due to federal regulations.

Opposition and Removal of Provisions

Arguments Against Cannabis Banking Protections

During a full House Appropriations committee meeting, Republican U.S. Representative Chuck Edwards of North Carolina voiced his opposition to the banking protections. He stated, “Our country has never allowed a federally illegal activity to be banked” (The Hill).

Agreement to Remove Provisions

In an effort to pass the spending bill, Representative David Joyce, an Ohio Republican and chair of the Financial Services and General Government subcommittee, agreed to remove the banking language. Joyce, a prominent advocate for banking reform in Congress, emphasized his ongoing commitment to this issue: “I will not abandon this effort in Congress and will continue to work with my colleagues in good faith to ensure they become law” (The Hill).

Legislative Challenges

Previous Attempts at Cannabis Banking Protections

Despite strong support in a previously Democratic-controlled House of Representatives, cannabis banking protections have never received a full vote in Congress. Last year, a version of the SAFE Banking Act was considered in a Senate committee but did not advance to the floor. Passing major legislation in the Senate requires 60 votes, a challenging threshold to meet.

Future of Cannabis Banking Protections

It remains uncertain whether Republican House Speaker Mike Johnson will bring the SAFER Banking Act to a vote in the House. The cannabis industry and its advocates continue to push for these critical banking reforms.

Additional Provisions in the Spending Bill

Budget for the Alcohol and Tobacco Tax and Trade Bureau (TTB)

The earlier version of the government spending bill also proposed allocating over $158 million to the Alcohol and Tobacco Tax and Trade Bureau (TTB). Part of this budget was intended to develop a regulatory framework for marijuana. The House Appropriations Committee directed the TTB to evaluate state-regulated marijuana frameworks, including enforcement and oversight approaches. The committee also recommended improving data sharing and coordination between state and federal authorities (House Appropriations Committee Report).

Conclusion

The removal of cannabis banking protections from the federal spending bill is a significant setback for the cannabis industry. However, advocates like Representative David Joyce remain committed to pursuing these reforms. The ongoing legislative efforts highlight the complexities and challenges of integrating cannabis businesses into the mainstream financial system.

For more detailed information, please visit Cover Cannabis, a specialized insurance company serving the cannabis industry across the United States.

Sources

  1. The Hill: House Republicans Remove Cannabis Banking Protections
  2. House Appropriations Committee Report: Financial Services and General Government Appropriations Act
  3. Cover Cannabis: Specialized Insurance for the Cannabis Industry