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California Considers Creating Public Bank for Pot Business

by Countable | 2.3.18

What’s the story?

California officials are considering creating a taxpayer-backed bank to handle the estimated billions of dollars in revenue generated by the Golden State’s legal marijuana industry.

As the Sacramento Bee explained, because pot remains illegal at the federal level, "banks generally will not provide accounts to cannabis companies, forcing them to pay taxes and other expenses in cash."

Why does it matter?

State Treasurer John Chiang (D) said in a statement that:

"Cannabis firms are forced to deal almost entirely in cash, creating a rich environment for violent crimes, money laundering, and other illegal activity."

Chiang said the move is necessary after Attorney General Jeff Sessions announced last month that the DOJ was ending the policy that allowed states to relax restrictions on recreational pot without the threat of federal interference.

"California and other states will need to lead when it comes to bringing the cannabis industry out of the shadows so that it can be properly regulated to prevent sales to minors, to protect the public’s health and safety, and ensure cannabis businesses behave as legitimate tax-paying members of our economy," Chiang said.

Critics of the move claim a taxpayer-backed bank would create more problems than it solves.

"For a state that is already plagued with so many economic problems, despite its recent budget surplus, the idea of the state running its own bank should worry every person in California," said Yaël Ossowski, the Deputy Director for the anti-regulatory group Consumer Choice Center.

She added:

"A state-controlled bank will only invite scandal and mismanagement, and significantly limit growth for the industry in the long term."

What do you think?

Do you support a state-run pot bank? Will it help cut down on "money laundering and other illegal activity"? Or will it “only invite scandal and mismanagement”? Hit Take Action and tell your reps, then share your thoughts below.

—Josh Herman

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(Photo Credit: Planet Flem / iStock)

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