SACRAMENTO, Calif.–A member of California’s tax board called for a meeting to address the challenges—and resulting risks—this state’s cannabis industry is facing as a result of a lack of access to financial institutions.
The meeting was called by Fiona Ma, a member of the State Board of Equalization, who said she held the meeting to discuss any of a number of ideas for making financial institutions in California better able to work with marijuana dispensaries. Among the ideas discussed: a state-run banking system exclusively for dispensaries; an ATM system meant to make cash deposits easier for dispensaries; and creation of a paper trail for dispensaries so their record keeping would be more concrete, especially when dealing with cash.
The announcement comes at the same time a Colorado credit union has filed suit against NCUA after it was denied a master account by the Federal Reserve, as CUToday.info was the first in credit unions to report here.
When the California legislature reconvenes in August, meanwhile, it is expected it will also take up legislation to address how the state’s medical marijuana dispensaries handle what is now primarily a cash business, and what might be done to provide access to financial institutions, according to the Los Angeles Times.
As is the issue with the Colorado case, the hold-up remains that the use and sale of medical marijuana is not legal under federal law, and banks and credit unions have shied away from doing business with pot-related businesses as a result. California voters approved a measure in 1996 to legalize medical marijuana.
The Times reported that 105 financial institutions are engaged in banking with medical marijuana dispensaries, and quoted Janet Sanchez, senior vice president of Community Credit Union of Southern Humboldt, as saying the credit union would serve the dispensaries were it not for the federal regulations.
"We have opened a handful of cannabis-related accounts in the past," Sanchez told the Los Angeles Times. "The due diligence, the ongoing monitoring, the granular reporting, the incredible financial and staff time that it takes to deal with these accounts is overwhelming and not worth it.
"Frankly, most financial institutions are going to make the smart business decision of not participating," she said.