World's First Cannabis Bank Moves Forward In California
Cannabis consumers and business owners in California could be on their way to enjoying a safer, better regulated financial environment thanks to the passage of a bill by the California Senate. Senate Bill 930 aims to create a cannabis bank, separate from the federal banking system.
The bill was approved by the California Senate on Wednesday and received bipartisan support from senators. 29-6 voted in favor of legalizing a cannabis bank.
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Cannabis remains illegal on the federal level, making it near impossible for cannabis business owners and operators to make use of traditional banking services. Traditional banks will not work with businesses in the cannabis industry for fear of breaking federal law. Even the most reputable of cannabis businesses that do manage to open an account with a traditional bank often find that their account is shortly shut down and have to hop from bank to bank in order to keep an account open.
This poses a huge problem for operators in the cannabis industry. Even large businesses are forced to handle their finances largely in cash, resulting in both logistical and security challenges. Cannabis dispensaries have also been the target of an increased number of robberies, due to the large amount of cash that is often kept on site as these businesses cannot accept credit cards.
SB 930 would create a charter bank under the state of California. This cannabis bank would be able to issue checks to its account holders, who, in turn, would be able to use the checks to pay for large balances, such as rent, taxes, and money owed to other businesses for their services. Account holders would also be able to purchase state and local bonds with the checks.
The bill was introduced by Senator Bob Hertzberg (D) from Van Nuys.
"This is a short-term creative approach to deal with this extraordinary problem," he told local media.
It is thought that eventually, the federal government will allow cannabis businesses to work with the traditional banking system. The cannabis industry is one of the fastest growing industries in the United States and has the potential for immense profit. Until traditional banking is made to feel comfortable playing a part in this burgeoning industry, California's cannabis bank aims to solve many of the immediate problems cannabis businesses currently face.
Senate Bill 930 will now be passed to the State Assembly for further consideration.
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