House GOP strips language aimed at protecting banks from cannabis crackdowns

House Republicans nixed text aimed at protecting banks from cannabis crackdowns from a government funding bill after blowback from fellow GOP lawmakers.

The measure was included in the party’s initial version of its annual financial services and general government bill, one of the 12 annual funding bills Republicans are hoping to pass before fall. The bill covers full-year funding for the Treasury Department and federal payments for the District of Columbia and Securities and Exchange Commission, among other offices.

The provision would have blocked funding from being used to “penalize a financial institution solely because the institution provides financial services” to entities — like manufactures and producers — that participate in business legally involved in handling hemp and marijuana products.

But the language was stripped after Rep. David Joyce (R-Ohio), chair of the subcommittee that crafts the funding bill, noted that some of his colleagues had “taken issue” with the legislation.

“With over 40 states enacting some degree of cannabis reform, it is past time that the federal government respect the will of these states. This issue is especially pertinent as cannabis regulations have been proven to increase public safety and quality of life for Americans,” Joyce said.

“My Financial Services and General Government bill included provisions to do just that and ensure states’ rights to make the best choices for their unique constituencies are protected.”

His comments come after his subcommittee held a markup on the funding bill earlier this month.

During the markup, Rep. Chuck Edwards (R-N.C.) specifically took aim at the banking language, describing it as an “affirmative authorization disguised as a limitation” and noting the federal prohibition on marijuana.

“Our country has never allowed a federally illegal activity to be banked, and it’s important to note that, despite some states trying to legalize marijuana, still a Schedule I drug, marijuana is still illegal,” he argued. “And I believe that it should remain illegal. It’s dangerous, and more and more evidence is being found that it causes irreparable harm, particularly to younger minds.”

There is still much opposition to the idea of legalization of recreational marijuana in Congress, mainly on the Republican side of the aisle. 

But more have warmed to the idea of cannabis banking reforms in recent years as more states have legalized recreational marijuana. That’s given unprecedented momentum to the Secure and Fair Enforcement Banking Act of 2023, which Joyce introduced with other members last year to help improve banking access for legal cannabis business.

“While the provisions maintain strong bipartisan support, as Chairman, I will work to alleviate their concerns but will not delay my responsibility to fund the government and therefore my legislation in the meantime,” he said Thursday. “However, let me be clear, I will not abandon this effort in Congress and will continue to work with my colleagues in good faith to ensure they become law.”