Last week, California lawmakers moved to create a bank backed by the state that would help handle money from the state’s newly created recreational marijuana market. The bill, SB930, which would allow charter banks and credit unions regulated by the California Department of Business Oversight to provide limited banking services to cannabis-related businesses. SB930 would allow businesses to pay taxes and other local fees, rent, and in-state vendors for goods and services related to their cannabis businesses, as well as purchase both state and local bonds and make other investments. The bill would not utilize the federal banking system.The bill was approved by a bipartisan Senate vote of 29-6 last Wednesday, and now moves to the state Assembly for consideration.
Senator Bob Hertzberg (Democrat, California), who proposed the bill, told CBS’ Sacramento affiliate, “We’re not using the federal system, we’re not using the federal wire. This is a short-term creative approach to deal with this extraordinary problem.” He also indicated that these state-backed banks would suffice as a solution to the problem of cash-only transactions until what he hopes will be a change in federal law.
California has the world’s largest recreational cannabis industry, which is projected to grow to $7 billion.