The state Senate this week passed a bill to create a state-chartered bank for California cannabis businesses, which would allow licensed merchants to write checks to pay taxes, fees and vendors — rather than use large amounts of cash, as they currently do.
The measure, SB 930, introduced by state Sen. Robert Hertzberg, D-Van Nuys, now heads to the Assembly.
Because marijuana is classified by the federal government as a Schedule 1 drug, federally insured financial institutions cannot process cannabis-related transactions without running the risk of facing money-laundering charges.
The bill would establish banks and credit unions, regulated by the state Department of Business Oversight, that could process deposits, withdrawals and other transactions by cannabis businesses. Its proponents say it would improve security at cannabis shops, which largely operate on a cash-only basis and transport large amounts of cash in armored vehicles to pay taxes.
“It’s not only impractical from an accounting perspective, but it also presents a tremendous public safety problem,” Hertzberg said 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. ”
California this year legalized the sale of cannabis for recreational use, which is expected to propel a rise in cannabis sales. The state is poised to collect $600 million in cannabis taxes in 2018, the Department of Finance estimates.
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