Two steps forward, one step back: That continues to be the story for cannabis banking in California. State legislators keep talking loudly about creating a state-licensed bank to service the cannabis industry, but no bill has yet made it through the long process to become official.
The latest attempt was from Sen. Bob Hertzberg of Van Nuys, who introduced SB 930 “Financial institutions: cannabis.” This bill would have opened the doors for cannabis businesses to more easily pay taxes, employee paychecks, and much more though “Green Banks.” Though the bill enjoyed bipartisan support as it wound its way through committee after committee this summer, the cannabis banking bill still missed the Aug. 31 deadline for a chance at becoming California law this year. The dream of easier and more secure cash management for cannabis businesses in the Golden State will have to remain a dream. For now.
A public safety issue
Hertzberg considers the lack of banking for cannabis businesses to be a public safety issue, according to a statement he released after the bill died in committee. “Barrels of cash buried all over the state” and large, onsite vaults aren’t secure money storage systems, but it’s what many in the industry have come to rely on in the absence of support from financial institutions. From bootstrap entrepreneurs to well-funded corporations, cash solutions are the norm.
A state-licensed bank, as outlined by SB 930, would have filled the gap where many traditional financial institutions currently fall short. The federal prohibition on cannabis and its status as a Schedule I drug make it a risky move for federally regulated banks to deal with cannabis clients (although the innovative Hypur service makes it easier for banks to trust working with cannabis businesses). Even those who accept money from cannabis businesses could find themselves in hot water. A political candidate for agriculture commissioner in Florida recently had her account closed by Wells Fargo because she accepted money from medical cannabis lobbyists.