California Is Pondering a New Kind of Bank
by Kevin Drum
Posted February 12, 2018
States can legalize marijuana all they want, but it’s still a federally prohibited Schedule I drug. This presents legal marijuana dealers with a problem: where do they keep their money? Banks are under federal supervision, and few of them want to take the chance of knowingly accepting drug money that might later get them in trouble with the feds. California, as always a bellwether for the nation, thinks it might have an answer:
California’s treasurer and attorney general will study whether the state should create its own publicly owned bank to serve the state’s now-legal cannabis industry….There are numerous obstacles to creating such an institution, especially if the plan is for the bank to openly work with cannabis companies.
John Chiang and other public officials have said the lack of banking access for cannabis companies, which has left the industry largely reliant on cash, poses public safety risks and makes it more difficult for the state and local agencies to monitor the industry and ensure businesses are paying their taxes. More…