Californina has always seemed like a country inside of a country. The second largest state in the union, California has walked to their own beat since it’s inception. When it comes to cannabis, the state would really position itself as it’s own special place if they create their own bank to assist with those who are in the cannabis business.
Per TheCannafornian
Los Angeles city leaders are looking into the possibility of setting up a public bank that would do business with marijuana dispensaries, as well as cater to affordable housing developers.
Council President Herb Wesson proposed the idea in a speech at City Hall, laying out his agenda for the next two years. He said a municipal bank would be able to focus on providing financing to small businesses and developers of affordable housing.
The announcement comes as Oakland is also considering opening its own bank.
“Imagine, if this is possible, to have a bank, where its vision statement is to finance the building of affordable housing,” he told his colleagues on the City Council. “Imagine if we have a bank that is focused on working with small business entrepreneurs to give them loans.”
But while Wesson pointed to the various reasons a municipal bank would be a good idea, it also comes at a key moment for California’s cannabis industry, which will become legal for recreational use in 2018.
Businesses selling marijuana in California, where it has been legal for medicinal use for years, often operate as cash businesses. That is because major banks do not want to open accounts or offer services with them, in fear of violating federal laws that lump cannabis together with drugs like heroin as “Schedule I” narcotics.
The city is also working on a local program to allow marijuana businesses to operate legally and to repeal Proposition D, a 2013 voter-approved measure that banned pot shops while giving immunity to up to 135 that had submitted their applications to the city by a certain date.
“We won’t be like a giant ostrich and stick our heads in the sand, because we recognize that 80 percent of the people in this city voted for us to regulate, tax and police the cannabis industry,” Wesson said Tuesday, referring to Measure M, which was approved by voters in March.
He pointed to examples of the lengths cannabis businesses operators have gone to safe-keep their money, such as the “people that are going to go home tonight and sleep on a mattress that’s worth $2 million” and those who “have a million and a half dollars in cash buried in the back yard.”
We have to figure out a way to make this industry work,” he said.
He told reporters afterward that while it might be an unusual idea, “alternative banking” has been floated by multiple groups, including people affiliated with the cannabis industry.
Helping the marijuana industry succeed could prove lucrative for the city of Los Angeles. City leaders estimate that once more marijuana businesses are allowed to operate legally, as much as $50 million in tax revenue from the cannabis industry could flow into city coffers in the first year.
Gregory Meguerian, the owner of a medical marijuana dispensary in Van Nuys, said that while Los Angeles accepts business tax payments in cash, the state’s Board of Equalization won’t take the bills.
“It’s very difficult to try to pay them 10,000-plus dollars a month and you have no bank account,” he said.
Difficult to say the least. California making such a move like creating a bank of it’s own, shows how much they value the industry that is being built on it’s soil.