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cannabis banks california

California is far from alone in looking for a banking solution. Attorneys general from 38 states and territories recently begged congressional leaders to pass the SAFE Banking Act, which would protect banks and credit unions from legal concerns if they work with cannabis money. The proposed SAFE bill has 206 cosponsors from both parties and passed a U.S. House committee in March.

And should it be signed into law, it comes with its own poison pill. If the federal government removes cannabis from its list of illegal substances, giving banks free reign to operate in the space, the California law would become void.
“We’ve got all sorts of public safety issues around [cannabis banking],” said California Senate Majority Leader Robert Hertzberg, the Democrat who authored the newly passed Senate Bill 51. “We have to come up with a way to make this work. There’s almost over 900 banks’ branches in California that could easily be converted into bank branches to handle cannabis cash.”

California is one step closer to providing the state’s burgeoning cannabis industry with legal banking services.
“Our banking system must be flexible enough to address the needs of businesses in the various states and territories, with state and territorial input, while protecting the interests of the federal government,” wrote the attorneys general. “This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy.”
State Sen. Bob Hertzberg, D-Van Nuys, urges lawmakers to approve his measure to create a . [+] state-backed bank to handle the billions of dollars from the newly legal recreational marijuana market, Wednesday, May 30, 2018, in Sacramento, Calif. By a bipartisan 29-6 vote the Senate approved the measure and sent it to the Assembly. (AP Photo/Rich Pedroncelli)
Hertzberg also authored and fought for an earlier bill, SB 930, which the California State Assembly effectively killed last August. The two bills are nearly identical, but now there is a new governor in town who might be more amenable to banking laws that could help the cannabis industry. The new bill, which would create the Cannabis Limited Charter Banking and Credit Union Law, would authorize the limited charter bank or credit union to issue special-purpose checks to cannabis businesses in order to pay government fees, taxes, rent and vendor invoices. The proposed law would require that the charters be insured.
This is far from the full range of commercial banking services our industry needs. And, given that cannabis is federally illegal, banks and credit unions in California might still be wary of setting up charters for this purpose. But hopefully a law like this one might pressure the federal government into positive action for this $52 billion (and growing) industry.

In the meantime the current California bill is awaiting its fate in the State Assembly.

California is one step closer to providing the state’s burgeoning cannabis industry with legal banking services.