California Cannabis Banking: An Update | Canna Law Blog™
The lack of reliable banking services has always been a problem for the cannabis industry. We’ve seen the dearth of banking options pose problems for fundraisers, advocacy groups, and state-chartered financial institutions.
Though 29 states and the District of Columbia have broadly legalized medical use of cannabis (eight of those states have also legalized adult-use), cannabis is still illegal under federal law and most financial institutions refuse to bank cannabis businesses. It is against this backdrop that California State Treasurer John Chiang last week released a report (“Report”) outlining California’s approach to this problem. The Treasurer estimates California adult-use cannabis sales will exceed $7 billion by 2020 and will bring in approximately $1 billion a year in state tax revenues. The Report affirms that the status quo on cannabis banking is untenable for an economy the size of California’s.
The Report lists the following four areas as those on which the State of California must act:State taxing agencies, the Treasurer’s office, and financial institutions should contract with an armored courier service to collect state tax and licensing payments. The State of California should install smart safes and kiosks at government agencies and cannabis businesses. California cannabis businesses should be allowed to use money services businesses for smaller tax payments. California cannabis businesses should be allowed to use third-party payment services to make electronic payments (think PayPal or Venmo).
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- California Board of Equalization Calls for Cannabis Banking Serviceswww.ganjapreneur.comOctober 21, 2015
- Banking the Cannabis Industry: Takeaways from the California Cannabis Banking Working Group - Cannabis Business Executive - Cannabis and Marijuana industry newswww.cannabisbusinessexecutive.comAugust 18, 2017