By Benjie Cooper
IG: @nuglifenews
YouTube: Lucid’s Vlog
California recently moved up a notch in global economic ranking, pushing past the United Kingdom to claim the title of fifth-largest economy in the world. But the state’s status wasn’t built solely on cash-based transactions; sanctioned financial institutions are an integral part of the state’s everyday commerce.
The Golden State’s cannabis industry has managed to survive apart from the United States’ federally-regulated banking system so far, but a cash-only system is not going to cut it in the long run with a large and lucrative legal market like California’s.
In January, Senator Bob Hertzberg [D] introduced SB930, a bipartisan bill aimed at providing a way around the banking issue by allowing for “the licensure and regulation of cannabis limited charter banks and credit unions for the purpose of providing limited banking services, as defined, to cannabis businesses.”
The Department of Business Oversight would be responsible for the regulation of banks and credit unions established under SB930. Chartered financial institutions would issue checks which account holders could use for business expenses like rent, vendor payments, taxes, and other state fees. Checks could also be used to “purchase state and local bonds and other debt instruments.”
Employers would not be able to pay their workers with the checks due to federal income tax payments which would alert the federal government. The system proposed under SB930 would be isolated and would operate completely separate from FDIC territory.
“The status quo for our growing legal cannabis industry is unsustainable,” Said Hertzberg in a press 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.”
Wednesday, after a third reading in the Senate, an amended version of SB930 passed with a 32 to 6 vote. Having gained Senate approval, the bill is now in Assembly where its first reading took place Friday.
