The California Senate approved a bill on Wednesday that would create a state bank for marijuana businesses. The measure, Senate Bill 930 (SB 930), received bipartisan support from senators, who voted 29-6 in favor of the legislation.
Strict federal regulations make it difficult or impossible for most cannabis firms to make use of traditional banking services. As a result, even legal cannabis companies must do business largely in cash. The vast amounts of currency present both logistical and security challenges to the industry.
Under SB 930, the state would establish a special charter bank that could issue checks for use by account holders. Businesses could use the checks to pay rent, state and local taxes and fees, and to reimburse California vendors for goods and services. Account holders could also purchase state and local bonds and other debt instruments with the checks.
Sen. Bob Hertzberg, a Democrat from Van Nuys, introduced SB 930, and said in a release that California’s fledgling cannabis economy needs the special bank in order to operate safely and efficiently. The new bank would also increase security at marijuana dispensaries and other businesses, where stockpiles of cash can be a tempting target for thieves.
“The status quo for our growing legal cannabis industry is unsustainable,” said Hertzberg. “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.”
New Bank Will Be Separate from Federal Financial System
Hertzberg believes that the federal government will eventually grant the cannabis industry access to the traditional banking system. But until then, the special bank will be able to offer limited services outside