California Senate Passes Bill to Create Banking Alternative for Cannabis Industry, Bypass Federal Reserve

SACRAMENTO, Calif. (June 6, 2018) – Last week, the California Senate passed a bill that would establish limited state-chartered banks to serve the cannabis industry. Final passage of this legislation would remove a major federal roadblock in front of the developing marijuana industry in the state and further nullify federal prohibition of cannabis.

Sen. Bob Hertzberg, (D-Van Nuys), along with a bipartisan coalition of nine cosponsors, introduced Senate Bill 930 (SB930) in January. The legislation would create a self-contained banking system for the cannabis industry in California.

Because marijuana remains illegal under federal law, cannabis businesses in states that have legalized marijuana remain effectively locked out of the banking system. If a federally chartered or insured financial institution touches marijuana money, it takes on significant legal risk. The federal government insures or charters virtually every bank in the U.S. As a result, cannabis businesses have been forced to transact almost exclusively in cash. Passage of SB930 would completely bypass the federal banking system and create a limited banking alternative for the marijuana industry in California.

Under the proposed law, the state would license “cannabis limited charter banks and credit unions.” Cannabis businesses would be able to deposit …

Read more at The Tenth Amendment Center
(The opinions in this article are the opinions of the author and do not necessarily represent the views of Southern Nation News or SN.O.)

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