Cannabis and banking in the same sentence? If Sen. Robert Hertzberg, D-Van Nuys of California gets his way, limited-service banks and credit unions would help facilitate financial transactions within the industry. The Senate Bank and Financial Institutions Committee has approved the bill called the Cannabis Limited Charter Banking Law. It now will go before the California Senate. Regular marijuana banking laws could soon be common practice.

A Weed Bank?

All banks would not suddenly handle all marijuana business finances though. Instead, it would permit cannabusinesses to deposit money into specially-created banks and then checks would be provided by these bank for cannabis expenses (e.g. fees, taxes, rent, and bonds, etc.). Within California, the bill would need the Department of Business Oversight, which is the financial regulator in the state, to monitor these cannabis-based charter institutions. But the Department has not yet taken an official stance on the bill.

Do you want that in Big Bills or Small Bills?

The federal government regulates most banks and credit unions. So, to many, it creates a sticky situation to deal financially with businesses that sell a product that is legal within the state but illegal federally. Cash has thus become the common form of payment to help avoid potential liability issues. But the inability to transfer money through banks means marijuana businesses have no access to direct deposit or electronic payments. Bill 930 would permit electronic movement of money just not through the automated clearinghouse, ACH, which is what the federal checking system uses.

For Cannabis, It’s a Bank Time

The quest by the marijuana industry to bank like any other business has been ongoing. Earlier this year, Congress received a letter imploring them to reconsider the exclusion. California Attorney General Xavier Becerra was one of the signers. But the Controlled Substances Act still designates marijuana as Schedule I. And the Bank Secrecy Act, the USA Patriot Act, and the Racketeer Influence and Corrupt Organizations Act (RICO) permit prosecution if banking with cannabis businesses.

The Feds Still Rule Marijuana Banking Laws

Many financial organizations in California have yet to make their position on the issue known. This includes the California Bankers Association and the California State Treasurer’s Office. Both groups believe if marijuana banking laws are going to change, it has to come from the federal government. Even so, the State Treasurer’s Office has been studying the idea of a state bank to service the cannabis industry.

Will Bill 930 push these banking organizations to finally develop a safe way for cannabusiness to exchange money? Next stop, the California Senate.

The California Market is Changing

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