GOP-Controlled House Strips Cannabis Banking Protections From Government Spending Bill In Blow To Legal Marijuana Industry

Zinger Key Points
  • The provision would have prevented the use of funds to penalize banking institutions for providing services to legal cannabis companies.
  • "With over 40 states enacting some degree of cannabis reform," said Rep Dave Joyce, government should "respect the will of these states."

U.S. House Republicans have decided to scrap a provision aimed at protecting banks from federal crackdowns on cannabis-related businesses from a significant government funding bill.

This move came after notable resistance from within its own party, reported The Hill Thursday afternoon.

The contentious provision would have prevented the use of funds to penalize financial institutions solely because they provide services to legal hemp and marijuana businesses.

Rep. David Joyce (R-Ohio), who chairs the subcommittee responsible for drafting this funding bill, explained that some of his colleagues expressed concerns about the provision, which was part of the GOP’s annual financial services and general government bill.

"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."

Joyce's bill initially included the provision to safeguard states’ rights to regulate cannabis as they see fit. However, during a recent subcommittee markup, Rep. Chuck Edwards (R-N.C.) criticized the banking protection language. He argued that it served as a veiled endorsement rather than a restriction, pointing out that marijuana is still federally illegal.

“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,” Edwards argued. He further insisted that marijuana should remain illegal, citing growing evidence of its potential harm.

The debate highlights the ongoing division within Congress, particularly among the Republicans, over the legalization of recreational marijuana. That said, there is a growing faction in favor of cannabis banking reforms, mostly driven by the growing number of states that have legalized recreational marijuana and the growing support for legalization.

This shift has fueled support for the Secure and Fair Enforcement Banking Act of 2023, which Joyce and other members introduced last year to improve banking access for legal cannabis businesses.

“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,” Joyce said.

Photo: Britannica

Market News and Data brought to you by Benzinga APIs
Posted In: CannabisGovernmentNewsRegulationsPoliticsLegalTop StoriesCannabis BankingChuck EdwardsCongressDave JoyceGOP HouseStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Top Cannabis Event In New Jersey

Join the Benzinga Cannabis Market Spotlight in New Jersey on June 17th! Grow your business, raise money and capitalize on the booming NJ recreational market. Don’t miss this must-attend event in New Brunswick. Secure your tickets now. Very few spots are left. Use the code "JAVIER20" for 20% off!