A bill that would allow financial institutions to offer limited banking services to the state’s legal cannabis businesses cleared the state Senate Wednesday.
Senate Bill 930, introduced by Sen. Bob Hertzberg, (D-Van Nuys), passed the Senate on a 29-6 vote, according to Hertzberg’s office.
The bill seeks to allow the $10 billion legal cannabis industry to use financial instruments so that it does not have to do all its business in cash. The industry is currently locked out of the banking industry, because federal law forbids federally regulated and insured banks or credit unions from knowingly accepting cannabis money.
Under SB 930, California would allow for the creation of limited-charter licenses for banks and credit unions overseen by the Department of Business Oversight, the state’s financial regulator. The special-charter institutions would be allowed to issue special checks that could be used to pay state or local fees and taxes, rent on property associated with cannabis businesses and vendors of the pot businesses, or to buy state or local bonds or warrants.
“The status quo for our growing legal cannabis industry is unsustainable,” said Hertzberg in a news release. “It’s not only impractical from an accounting perspective, but it also presents a tremendous public safety problem. This bill takes a limited approach to provide all parties with a safe and reliable way to move forward on this urgent issue.”
The bill was co-sponsored by Board of Equalization member Fiona Ma.
“California can’t wait to take action,” she said in a news release. “With secure banking for cannabis through SB 930, the industry will benefit, the state will get a revenue boost and pot cash will get off our streets.”
The bill now heads to the Assembly.
Source: Sacramento Business Journal, https://www.bizjournals.com/sacramento/news/2018/05/31/legislation-to-create-cannabis-banking-alternative.html