While there have been attempts at the federal level to ensure the availability of cannabis banking services, the Golden State is forging ahead with its own strategies so it can be prepared for the rollout of recreational cannabis in 53 days.
On Nov. 7, 2017, California State Treasurer John Chiang held a news conference at the California State Capitol to release and discuss “Banking Access Strategies for Cannabis-related Businesses,” a report drafted by the State Treasurer’s Cannabis Banking Working Group.
“It is unfair and a public safety risk to require a legal industry to haul duffle bags of cash to pay taxes, employees and utility bills,” Chiang said in a press release. “The reliance on cash paints a target on the back of cannabis operators and makes them and the general public vulnerable to violence and organized crime.”
With that in mind, the report by the Cannabis Banking Working Group focused on elements of public safety, improved revenue collection and establishing cannabis as a well-regulated industry, recommending the following four strategies to improve cannabis banking services:
- Contract armored courier services at the state and local level to pickup, count and deliver tax and licensing payments;
- collect data from state and local governments via an online portal, fulfilling the federal requirement for banks to “know their customers” before doing business with them;
- study the feasibility of launching a state-owned bank to provide cannabis banking services; and
- launch a multi-state cannabis consortium to act as a resource for states with legal cannabis and to lobby lawmakers at the federal level. The consortium would include representatives from states with legal cannabis, members of local governments and members of financial institutions.
Chiang and the Cannabis Banking Working Group have acknowledged that the aforementioned strategies are stopgap measures, not solutions.
“The reality is that a definitive, bullet-proof solution will remain elusive until the federal government removes cannabis from its official list of banned narcotics or Congress approves safe harbor legislation protecting banks that serve cannabis businesses from prosecution,” Chiang explained.
While California may not have a permanent solution to enable access to cannabis banking services, it is taking critical steps to pave the way for cannabis banking when cannabis is legal federally.
“California has exercised national leadership in areas ranging from enhancing civil rights to protecting the environment. The arrival of legal adult-use cannabis offers another opportunity for our state to model a path forward to a safe and economically viable new industry,” Chiang said.