Privately-Funded Marijuana Banks Proposed For California Cannabis Cash
SAN FRANCISCO (KPIX 5) -- Managing the billions of dollars generated by California'a cannabis industry has been one of the industry's main problems. Now the state is one step closer to getting that money into banks.
Since marijuana sales are still illegal under federal law, banks cannot work with dispensaries.
"[Dispensaries] want to pay their taxes," said state Sen. Scott Wiener (D, San Francisco). "They want to operate like a professional business, and they're very frustrated because they don't want to carry around suitcases of cash."
When California voted to legalize recreational marijuana, many cities wanted a piece of the pie. The industry is subject to a sales tax, a cultivation tax, a city tax and a state excise tax. The state is expected to collect 600 million dollars in cannabis taxes this year - all in duffel bags of cash.
"They're going to be receiving a significant significant amount of money in a couple of days, as the first quarter excise tax has to be remitted," said Sabrina Fendrick with the Berkeley Patients Group.
Weiner is co-sponsoring a bill that would allow for the creation of privately-financed banks, regulated by the state, to work with the cannabis industry. He says the current system is not only dangerous for dispensaries, it's difficult for the state to collect money from them.
"You're risking crime, you're risking tax evasion," said Wiener. "It makes it very hard to audit the industry."
"There are just a lot of expenses and it becomes very dangerous and very challenging to move all this cash into other facilities and to pay people," said Fendrick.
In addition, Fendrick says dispensary has to coordinate hiring armed guards, not just for the front of the store but also to accompany the cash on the road.
"Cannabis legalization is here to stay it's a legitimate legal industry and its time to start treating it like one.
Last week, the Trump administration softened its stance on cannabis banks, saying it will allow states to decide this issue on their own. But industry leaders are still anxious the president could change his mind, so they'll be hoping this bill passes smoothly.
A report from a cannabis industry research firm estimates California sales of cannabis will approach nearly $4 billion by the end of 2018.
