SACRAMENTO, Calif.–The California State Senate has passed a bill that would establish a state-chartered bank for cannabis businesses as well as a Credit Union Advisory Board.
Under the proposed bill, SB-930, banks could issue checks to account holders to pay state and local taxes and fees, pay vendors from California for goods and services provided to the cannabis business, pay rent, and purchase state and local bonds and other debt instruments.
The bill’s sponsors say the lack of banking services creates regulatory and public safety issues for state and local governments, and that the use of cash by many in the industry makes it difficult for the government to keep track of the money.
The bill proposes the Cannabis Limited Charter Bank in addition to the Credit Union Advisory Board, which would review department enforcement reports, hold meetings open to public comment, and issue recommendations to the legislature.
‘Status Quo Unsustainable’
The Commissioner of Business Oversight and the Department of Business Oversight would administer and enforce all laws associated with the bill.
“The status quo for our growing legal cannabis industry is unsustainable,” Sen. Bob Hertzberg (D-Van Nuys) said in a press release. “It’s not only impractical from an accounting perspective, but it also presents a tremendous public safety problem. This bill takes a limited approach to provide all parties with a safe and reliable way to move forward on this urgent issue.”
The California Department of Tax and Fee Administration said earlier this year that tax revenue that includes state cultivation, excise, and sales taxes from the cannabis industry totaled $60.9 million for the first quarter of 2018. According to SB-930, the cannabis industry is now expected to generate more than $8 billion in revenue annually.
The bill is now in the California Assembly for committee referral.