This week, the California Senate approved legislation that would create an official banking system by allowing for state-chartered banks.
According to CNBC this legislation was approved at a vote of 35 to 1. It will allow banks and credit unions to apply for a limited-purpose state charter that will allow cannabis businesses to make deposits. This ruling, known as Senate Bill 51, will not officially become a law until it is signed by the Gov. Gavin Newsom.
Currently in California and other legal states, cannabis businesses are either forced to deal in cash or bank through a parent company that isn’t involved in cannabis. This keeps the industry closer to the black market and causes cannabis businesses to deal in unsafe, large amounts of cash. “It’s hard to imagine an industry that at this point is as large as, like, craft beer that does not have banking as we have come to know it,” Steve Hawkins, executive director of the Marijuana Policy Project, told CNBC. “As policymakers, we have a duty to further the will of the voters while protecting the public safety of our constituents,” California Senate Majority Leader Robert Hertzberg said when first introducing SB-51. “This measure is by no means the ultimate solution, but it’s just one small step in the right direction to get some of this money off the streets and into bank accounts.”
This isn’t the first step that the state of California has taken to become more compliant and regulatory. The state currently does not use a tracking system, and there are some who would like to implement something like this to keep better track of cannabis. California is currently ranking in millions in tax dollars, and is ready for more necessary regulation.
The passing of this law would help shape the cannabis banking system in California, and could set the tone for other states to follow suit.