SACRAMENTO–The Banking and Financial Institutions Committee on Wednesday unanimously approved a bill that would allow limited merchant banking for cannabis businesses in California.
Senate Bill 930, if eventually passed by the state senate, would allow for the creation of limited charter banks and credit unions with the specific functions of holding cash assets for cannabis merchants and issuing special purpose checks for account holders.
Senator Robert Herzberg (D-Van Nuys) co-authored the bill.
“Everyone agrees that there has to be a better way for cannabis companies to do business,” said Sen. Hertzberg in a press release. “They simply cannot and should not have to continue to run their businesses like black market operations. We’ve been seeing tremendous interest and getting input from stakeholders across the state, and I’m confident we’re going to get this done.”
The bill’s co-author and Board of Equalization member Fiona Ma noted that lack of necessary banking regulation and protocols for the cannabis industry are impeded by the inability of cannabis businesses to secure even basic banking services or documentation.
“Without some sort of paper trail, there’s no way for us to audit these companies efficiently or effectively,” Ma said. “This bill is necessary, it is pertinent, and it is something that we need to move forward on, especially if the federal government is not willing to.”
Banks, payment processors, and other financial institutions are prohibited from servicing cannabis clients because of federal prohibition on marijuana.
The proposed bill now moves on to the Governance and Finance Committee.
Image: Nick Youngson/Alpha Stock Images.
