The California Senate passed legislation that would allow state chartered banks to conduct limited services for cannabis businesses. Currently, federal regulations prevent or severely limit banks and credit unions from opening accounts and doing business with cannabis businesses. However, the new legislation would be for limited purposes that would not entangle the banks with federal laws. California cannabis companies could use the banks to pay rent, state or local taxes and fees, and California vendors for goods and services. The banks could also be used to buy state and local bonds and related investments.
Many of my clients conduct transactions in cash, which is dangerous and also hard to regulate and audit. Allowing banks to conduct some transactions for cannabis companies would increase safety by letting businesses have less cash on hand while giving the government better oversight protections.
The idea of state chartered banks has been discussed in other states with legal marijuana, including Colorado and Washington State. The legislation in California would need to be passed by the Assembly and then signed by the Governor, neither of which are guaranteed as of June 2018. However, this issue will continue to be a thorn in the industry's side until changes are made at the state and/or federal level.
If you have questions about your cannabis business in California, contact Kellan Martz Law today. We are able to assist you with regulations, permitting, and criminal concerns. Email attorney Kellan Martz at firstname.lastname@example.org or call 323-522-4440.