The state Senate passed a bill earlier this month to create a state charter for banks to enable them to serve California cannabis businesses, which would allow licensed merchants to write checks to pay taxes, fees and vendors.
Senate Bill (SB930), was introduced by state Senator Robert Hertzberg, (D-Van Nuys), passed the Senate with a 29-6 vote, is now heading to the Assembly.
The bill seeks to allow the $10 billion legal cannabis industry to use financial instruments, banks and credit unions so that it does not have to do all its business in cash, according to the San Francisco Chronicle.
Because marijuana is still classified as a Schedule 1 drug, the industry is currently locked out of the banking industry and federally insured financial institutions cannot process any cannabis-related transactions without the risk of facing money laundering charges.
Proponents say the move would also improve security at cannabis shops, which are forced to operate on a cash-only basis and pay taxes with money they carry in armored vehicles.
“It’s not only impractical from an accounting perspective, but it also presents a tremendous public safety problem,” said Hertzberg in a statement. “This bill takes a limited approach to provide all parties with a safe and reliable way to move forward on this urgent issue.”
Meanwhile, the nation’s banks are taking on Attorney General Jeff Sessions over pot with a big lobbying push to loosen federal restrictions on the surging legalized marijuana industry.
Emboldened by support, although still not clear, from Donald Trump and Senator Elizabeth Warren (D-Mass.) top banking trade groups are pressing policymakers to make it easier for their members to serve the cannabis business industry.
Even Jerome Powell, chairman of the Federal Reserve, is pushing for action on the issue.
“This is a very difficult area,” Powell said during a press conference in mid-June. “It puts federally chartered banks in a very difficult situation. It would be great if that could be clarified.”