LOS ANGELES — The fate of a bill that would allow state-chartered banks and credit unions to provide services to California’s marijuana businesses could be determined Thursday when a key hearing is held on the legislation.
The proposed legislation, state Senate Bill 51, is designed to help pot retailers and other marijuana firms that have been shut out from the traditional banking system. The measure would allow private banks or credit unions to apply for a limited-purpose state charter so they can provide depository services to licensed cannabis businesses.
California’s legal marijuana industry is struggling to compete with the black market and is facing challenges that include banking access and high taxes. Last week, California Gov. Gavin Newsom’s new state budget plan slashed cannabis tax revenue projections by $223 million.
Marijuana businesses, including pot shops, are forced to deal predominantly in cash due to continued federal banking restrictions that make it nearly impossible for them to have bank accounts with federally chartered financial institutions. There’s also an effort underway at the federal level to pass legislation that would allow banks to serve cannabis-related businesses without the risk of being prosecuted.
Published: May 14, 2019
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