There will be plenty of stoned Californians on Friday, the first 4/20 celebration since recreational marijuana became legal in the state.
Thank goodness that some sober folks in the Legislature are finally taking on a major problem – how to handle all the cash in what is projected to be a $7 billion industry by 2020.
On Wednesday, the state Senate Banking Committee unanimously approved a bill that would create a new state charter for private banks so they can do business with the cannabis industry. Growers, dispensaries, retail outlets and other pot-related firms could deposit cash and get checks to pay rent and taxes and their vendors. The banks would be allowed to get private insurance instead of federal insurance.
Senate Bill 930, introduced by Sen. Bob Hertzberg, D-Van Nuys, is supported by the California Cannabis Industry Association. The California Bankers Association hasn’t taken a position on the bill, saying the solution must still come on the federal level. Also, State Treasurer John Chiang is looking at a possible state-run bank for cannabis businesses.
This problem is not just a burden for pot businesses; it’s a public safety issue to have the industry awash in cash but cut off from banking. Federally regulated banks fear handling pot cash because marijuana remains illegal under federal law.
Those concerns have been heightened because Attorney General Jeff Sessions has threatened to enforce federal law, even in California and other states that have legalized marijuana. Now, there’s more optimism that states will get some leeway after President Donald Trump promised last week he would back a law protecting the legal industry, at least according to Sen. Cory Gardner of Colorado, the first state to make recreational pot legal, in 2014.
Then again, Trump changes his mind on major policy all the time, so California can’t take this to the bank.
Banking is only one of the major issues left unresolved by Proposition 64, approved by voters in 2016 to legalize recreational pot in California. State and local officials have been making up the rules as they go since the law took effect Jan. 1.
Among the questions harshing California’s mellow: How high can state and local taxes go before customers return to the black market? Will that mean revenue projections by state and local governments are overblown? As big growers snap up licenses, will there be too much consolidation for small grows to skirt limits on large-scale farms?
So while pot enthusiasts celebrate on Friday, we can’t forget about the serious public policies that must be done right for marijuana legalization to go as smoothly as possible.