House Committee Approves Marijuana Protections For Banking And D.C.

Published on June 24, 2021

By Kyle Jaeger


A House subcommittee on Thursday approved a large-scale funding bill that includes provisions protecting banks from being punished for working with marijuana businesses and allowing Washington, D.C. to legalize cannabis sales.


The move by congressional Democrats to let the District of Columbia set its own marijuana policies is in contrast with a budget released last month by President Joe Biden, which proposed continuing the longstanding Republican-led rider that has prevented the city from spending its own money to regulate adult-use cannabis commerce.


The banking-related provision is less far-reaching than more robust standalone bills the House has passed on four occasions, but would still provide some protections to banks that work with state-legal marijuana operators.


Both measures are attached to a bill to fund various federal agencies for Fiscal Year 2022 that was approved by the House Appropriations Financial Services and General Government (FSGG) Subcommittee in a voice vote. The full House Appropriations Committee is scheduled to take up the legislation on Tuesday.


In a press release, the panel called the rider blocking local D.C. marijuana policymaking an “objectionable” measure that “undermine[s] home rule.”


Rep. Eleanor Holmes Norton (D-DC) said in a press release that she’s “very pleased the bill respects D.C.’s right to self-government by allowing D.C. to spend its local funds as it sees fit, including on…recreational marijuana commercialization.”


“With Democrats controlling the White House, House and Senate,” she said, “we have the best opportunity in over a decade to enact a spending bill with no anti-home-rule riders, as this D.C. appropriations bill does and as I requested.”


After the Biden budget was released, Norton told Marijuana Moment that she was “very disappointed” over the decision, especially considering that fact that he’s voiced support for D.C. statehood.


The exclusion of the D.C. provision from the Fiscal Year 2022 FSGG appropriations bill could set the stage for conflict between lawmakers and the president. The Biden administration has already disappointed advocates by declining to take meaningful action on cannabis reform as promised on the campaign trail, and his inclusion of the D.C. rider was seen as an outright hostile act.


The District’s mayor said in April that local officials are prepared to move forward with implementing a legal system of recreational cannabis sales in the nation’s capital just as soon as they can get over the final “hurdle” of congressional interference.


The ongoing blockade is the result of an amendment that was first added by Rep. Andy Harris (R-MD) when Republicans controlled the House and has since been continued in annual appropriations legislation. The House on several occasions has since passed spending bills that do not include the cannabis ban, but it has been included in final enacted legislation because the Senate under GOP control insisted on reinserting it.


The president did notably include a separate long-standing rider in his budget proposal that would prevent the Justice Department from using its funds to interfere with the implementation of medical cannabis laws in states, however. President Donald Trump and President Barack Obama each called for ending the policy as part of their budget proposals, but Congress has consistently upheld it regardless.


In 2019 and last year, the House approved an even more expansive amendment that would have provided protections for all state and territory marijuana programs, rather than just medical cannabis systems. But the Senate did not follow suit and the provision was not included in final spending bill sent to Trump’s desk.


On several occasions when Trump signed large-scale annual spending legislation, he attached a statement that said he is empowered to ignore the congressionally approved medical cannabis rider, stating that the administration “will treat this provision consistent with the President’s constitutional responsibility to faithfully execute the laws of the United States.”


When it comes to banking, the House has not only passed standalone legislation to protect financial institutions from being punished for working with cannabis businesses, but has also included a rider on the topic in previous years’ appropriations bills. While the Senate under Republican control has refused to take up any of those measures, advocates are hopeful that the issue will advance now that the chamber has a Democratic majority.


The current House FSGG bill’s banking language reads:

“SEC. 629. None of the funds made available in this Act may be used to penalize a

financial institution solely because the institution provides financial services to an entity

that is a manufacturer, a producer, or a person that participates in any business or

organized activity that involves handling hemp, hemp-derived cannabidiol products,

other hemp-derived cannabinoid products, marijuana, marijuana products, or marijuana

proceeds, and engages in such activity pursuant to a law established by a State, political

subdivision of a State, or Indian Tribe. In this section, the term ‘State’ means each of the

several States, the District of Columbia, and any territory or possession of the United

States.”


The language would provide limited protections as compared to the more comprehensive standalone legislation on the topic, since it would need to be renewed annually and only applies to the Treasury Department. It provides no restrictions on the Department of Justice, which is covered under a separate appropriations bill, for example.


Meanwhile, the Biden administration is being closely watched by advocates when it comes to any marijuana policy development—especially since the president has maintained an opposition to adult-use legalization even as multiple bills to end federal prohibition are being drafted and introduced.


Perhaps unsurprisingly, Biden’s budget did not propose gutting the Office of National Drug Control Policy (ONDCP) as Trump did. The former president called for a roughly 90 percent cut in the agency’s budget in his proposals, but Congress did not follow suit. Biden helped to establish the drug czar’s office during his time in the Senate.


Biden’s budget also includes $17 million in funding to support industrial hemp production.


The FSGG measure is the first of twelve separate appropriations bills that Congress will take up this year. Advocates will be watching to see how lawmakers in both the House and Senate address cannabis issues in forthcoming spending measures in the coming weeks.

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