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Cannabis banking provisions clear House for seventh time

The amendment to the fiscal 2023 defense authorization bill faces an uphill battle to become law

Hemp flowers packed in containers sit on a table at Empire Standard, a hemp extract processing and distribution plant.
Hemp flowers packed in containers sit on a table at Empire Standard, a hemp extract processing and distribution plant. (AFP via Getty Images)

The House on Thursday passed for the seventh time provisions that would allow cannabis businesses to use banking services, although the amendment to the fiscal 2023 defense authorization bill faces an uphill battle to become law.

Past efforts to pass cannabis banking provisions, both as stand-alone legislation and as amendments attached to must-pass bills, have languished in the Senate, where a group of Democrats want to wrap banking provisions into a bigger package legalizing marijuana on the federal level.

Still, Rep. Ed Perlmutter, D-Colo., the amendment sponsor, cheered its passage and pushed for inclusion in the final law. He’s slated to retire at the end of this term.

“I’m calling on the Senate to take action for the safety of our communities and success of Veteran- and minority-owned businesses across the country,” he said on Twitter. “It’s time to get this done.”

The House voted 277-150 to adopt the amendment that would allow banks to provide services to cannabis businesses, which are currently barred under federal law. The chamber voted 329-101 to pass the defense bill.

Despite bipartisan and industry support, the amendment is unlikely to feature in the Senate’s version of the defense bill or make it into the final law. The provisions were stripped from the fiscal 2022 defense authorization law in conference. The Senate has yet to take up the stand-alone bill the House passed 321-101 in 2021. 

The House’s most recent effort to pass the cannabis banking provisions into law, as an amendment to its China competition bill, remains in limbo as representatives from each chamber negotiate the final bill language in conference. The Senate’s version of the bill excluded the banking provisions. 

Other legislation

The fiscal 2023 defense bill also provided a vehicle for the House to pass a number of other Financial Services Committee priorities, including some that previously cleared the chamber with bipartisan support.

The House voted 277-150 to adopt an amendment offered by committee member Rep. Jim Himes, D-Conn., that would define insider trading in statute for the first time.

Insider trading rules have evolved through court interpretations of securities laws that bar deceptive or manipulative trading. The result has been different standards applied across appellate courts.

The amendment would prohibit a company insider in possession of material nonpublic information from trading on it or passing along a tip to others to trade on. It closely mirrors Himes’ bill that cleared the House last year with bipartisan support. 

The bill stalled in the Senate amid debate about whether to remove provisions that would affirm that an insider must expect to benefit from passing along private information to be considered liable. 

The House adopted the Himes amendment en bloc along with 136 other amendments, including one offered by committee member Rep. French Hill, R-Ark., that would bar the U.S. from participating in transactions involving International Monetary Fund special drawing rights held by Russia or Belarus.

Hill’s amendment was one of four to attach the contents of previously passed Financial Services Committee bills that would leverage U.S. financial and diplomatic influence to punish Russia and help Ukraine. All four cleared the House with bipartisan support in May, but have yet to see action in the Senate.

As part of the same en bloc package, the House adopted an amendment offered by Rep. Jesús “Chuy” García, D-Ill., that would direct the Treasury Department to use its influence at multilateral development banks to ease Ukraine’s debt burden.

The House agreed by voice vote to adopt an amendment offered by Rep. Ann Wagner, R-Mo., that would direct U.S. financial regulators to seek to exclude Russian officials from some international meetings. In the same en bloc, the chamber adopted an amendment offered by Rep. Brad Sherman, D-Calif., that would clarify that subsidiaries of companies responsible for complying with sanctions must also comply.

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