Congresswoman Blasts Lack Of Cannabis Banking Protections In Key Spending Bill

Democratic Criticism of Cannabis Banking Omissions in Spending Legislation

A Democratic congresswoman from Minnesota is taking aim at congressional leaders for leaving cannabis banking protections out of a key federal spending bill. The Financial Services and General Government (FSGG) legislation advanced this week through the House Appropriations Committee, but it omitted language that has historically shielded banks working with licensed marijuana and hemp businesses.

Representative Betty McCollum emphasized that the lack of protections undermines financial stability for legitimate businesses. She argued that without clear federal guidance, hemp and cannabis operators face barriers to securing banking services, which forces many to operate primarily in cash and puts workers and consumers at risk.

Minnesota’s Legalization and the Broader Hemp Industry

Although Minnesota legalized adult-use cannabis recently, McCollum highlighted hemp as a central focus of her remarks. Hemp was legalized federally in 2018, but businesses cultivating and processing hemp-derived products still face major challenges when accessing financial services.

The congresswoman noted that in just six years, the hemp industry has rebuilt a domestic supply chain across the United States, supporting uses in textiles, construction materials, paper products, insulation, therapeutic oils, and medical applications. Despite its economic potential, hemp companies remain burdened by federal reporting requirements that dissuade banks from serving them.

Heavy Compliance and the Burden on Financial Institutions

Banks that do accept hemp-related accounts are required to file suspicious activity reports with the Financial Crimes Enforcement Network, regardless of whether those businesses are fully compliant with state and federal law. Many financial institutions consider the requirements excessive and fear penalties from federal regulators.

This regulatory uncertainty has resulted in many hemp and cannabis businesses relying heavily on cash transactions. Operating without access to stable financial services increases security risks, complicates payroll and taxation, and places employees and customers in vulnerable situations.

Bipartisan Pressure for Cannabis Banking Reform

McCollum’s concerns reflect broader bipartisan frustration with the lack of progress on cannabis banking reform. Earlier this year, a coalition of 32 state and territorial attorneys general urged Congress to pass federal legislation granting financial institutions the ability to work with cannabis businesses without fear of reprisal.

The Secure and Fair Enforcement Regulation (SAFER) Banking Act, which aims to address this issue, has been introduced in both chambers of Congress. However, progress has been slow. Senate sponsor Jeff Merkley of Oregon has pushed for movement on the bill, stating that it should advance as soon as possible, while Republican co-sponsor Bernie Moreno of Ohio has suggested it will likely not see floor consideration until later in the fall.

Legislative Gridlock and Uncertain Timelines

The House version of the legislation is being spearheaded by Republican Representative Dave Joyce of Ohio, who has repeatedly championed cannabis banking reform. His office confirmed earlier this year that he plans to reintroduce the bill but that its formal debut was not imminent.

For now, the omission of cannabis banking language in the FSGG appropriations bill leaves businesses in limbo. While supportive lawmakers have not ruled out pursuing amendments, McCollum did not attempt to insert provisions during the recent committee markup.

Appropriations Report and Federal Oversight of State Cannabis Models

Although the spending package excludes banking protections, it does contain a directive requiring federal agencies to evaluate the adequacy of state marijuana regulatory systems. This language suggests that lawmakers are at least considering ways to assess and potentially harmonize cannabis oversight across jurisdictions.

Still, critics argue that such reviews are no substitute for concrete financial protections, especially given the urgent needs of businesses that must manage payroll, taxes, and security without reliable banking access.

Ongoing Restrictions on Washington, D.C.’s Cannabis Market

The appropriations bill also maintains a longstanding rider preventing Washington, D.C. from using its own tax dollars to establish a regulated cannabis market. While the District has made progress in expanding its medical marijuana program, advocates see the rider as an infringement on local autonomy and a barrier to establishing a comprehensive legal framework.

Representative Andy Harris of Maryland has consistently championed the restriction, which has remained in federal spending bills for years. The White House has backed this stance, labeling D.C.’s efforts at cannabis reform a failure that has created disorder rather than stability.

A Clash Between State Legalization and Federal Inaction

The ongoing debate over cannabis banking protections highlights the widening gap between state-level legalization and federal policy. More than half of U.S. states now permit medical or adult-use cannabis, yet businesses in these states continue to lack reliable access to basic financial services.

Industry stakeholders argue that until Congress enacts reform, both cannabis and hemp businesses will face unnecessary risks and obstacles to growth. For lawmakers like McCollum, the failure to include banking protections in appropriations bills signals that Congress is failing to keep pace with changing laws, public opinion, and economic realities.

Will Cannabis Banking Reform Gain Momentum?

As Congress moves deeper into the 2025 legislative session, the future of cannabis banking reform remains uncertain. Appropriations bills could still serve as vehicles for incremental progress, but dedicated legislation such as the SAFER Banking Act appears more likely to provide lasting solutions.

Whether lawmakers can overcome partisan divides and competing priorities will determine if hemp and cannabis businesses finally secure financial stability or if they will remain locked in a cash-based system that undermines safety and economic growth. For now, industry leaders, patients, and policymakers alike are watching closely as the debate continues.

Congress is once again facing criticism for failing to address the financial challenges facing cannabis and hemp businesses. This week, the House Appropriations Committee advanced a key spending bill that excluded language to protect banks serving state-licensed operators.

Representative Betty McCollum of Minnesota called out the omission, noting that hemp businesses in particular are burdened by federal compliance requirements that deter banks from working with them. Many are forced to operate in cash, creating safety risks for employees and customers.

The broader issue of cannabis banking reform has long been on Congress’s agenda, with bipartisan lawmakers pushing the SAFER Banking Act. Despite strong support, movement has stalled, leaving businesses and financial institutions in limbo.

Meanwhile, the spending bill directs agencies to assess state cannabis regulatory models but continues to block Washington, D.C. from establishing a regulated cannabis market.

The debate underscores a persistent tension: states continue to expand legalization while federal inaction leaves critical gaps in financial protections. Whether Congress will act this fall remains an open question.