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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)

Countable

Written by Countable

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(104)
  • Marylynn
    02/03/2018
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    Awesome. Way to go CA... You'll be paving the way for the other states where it's legal to possess and use marijuana. Making it safer for marijuana businesses from getting ripped off. Show the Liar in Chief and his lackey AG Sessions that the states where's it's legal are going to protect the rights of it's citizens.

    Like (68)
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  • carolkravetz
    02/03/2018
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    As a Californian and activist I attended one of Treasure Chiang’s working groups on Cannabis and the possibility of public banking to accommodate this new billion dollar industry. Did I mention that the 45 admin is destroying jobs and economic growth by disallowing Cannabis and clean energy campaigns. But I digress. I am so happy Chiang (pronounced Chang) is moving forward with next step research into this possibility engage no the Attorney General working on the legal aspects of this endeavor. With 26 states currently allowing medicinal or recreational cannabis, these lawful entrepreneurs need a safe place to put their money, to pay their vendors and their TAXES. The City of Los Angeles is also considering opening a public (municipal) bank to better serve their communities. Their contract with Wells Fargo Bank is up in June. Divest LA worked tirelessly to proposed changes to their RFP, which leaves out most too-big-too-fail banks. That’s why the conversation of a public bank is now so prevalent.

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  • Sheryl
    02/04/2018
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    If the banking industry can launder money for the Republicans, drug dealers, and Putin, you would think they could accept marijuana proceeds. Such hypocrisy. Yes, let California start their own bank, since Wall Street can’t see a gift horse in the mouth.

    Like (32)
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  • Joseph
    02/05/2018
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    Lets just legalize pot at the federal level. A state-run bank will only limit growth of the industry

    Like (26)
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  • IMJae
    02/03/2018
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    North Dakota has a state bank. One way used to protect the bank is to require the State & it’s agencies to place their funds in the bank. I believe this helps to ensure the safety of the funds placed in the bank. Keeping marijuana absolutely legal and transparent keeps the business on the straight and narrow, keeping the darker side of marijuana businesses sidelined. These are businesses, who work legally and pay taxes. They should have the same protections as every other legitimate business as well as the same consumer protections. Way to go California! Hope your able to do this. It’s really good to see a state protect their “entire” population.

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  • I.Got.an.Idea...
    02/03/2018
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    Yes, However, it should be a Credit Union, and pay all of its employees a livable minimum compensation package that includes all benefits and 4 weeks vacation and control or cap management and executive salaries and it should also be a non-profit, where any and all windfalls go to the public to fight against oppression and corruption and corporate abuse and to generally benefit the Citizens.

    Like (19)
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  • burrkitty
    02/04/2018
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    State banks (although not necessarily state-run banks) are far better for the community than the big international banks like Chase and Wells Fargo. When it comes to money management, local money, local spending, local investment. That’s how you keep small towns alive.

    Like (15)
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  • John
    02/03/2018
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    The fact of the matter is that legalized marijuana is here to stay. If politicians want to keep the businesses above board they will make banking for them as easy as for any other business.

    Like (11)
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  • Bobby
    02/05/2018
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    Great idea!!!

    Like (10)
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  • RadicalModerate
    02/03/2018
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    California lawmakers would serve there country by leveraging their state economy, towards full federal legislation.

    Like (8)
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  • AnonymousPatron
    02/03/2018
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    Medical Marijuana has been prescribed in California since 1996 when it was voted on. I have read about families traveling here in order to treat their children with Cancer and other debilitating diseases where CBD and/or Cannabis actually helps them heal etc. banking is an important piece of this business. Otherwise thugs and criminals target the businesses and owners to steal from them. This is necessary.

    Like (7)
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  • Luc
    02/03/2018
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    I love California and fuck the Trump fascist regime. The comment by Gary about Californians being oppressed is so absurd. Right wing states is were the oppression exist hence the opioid epidemic. Oppressed by rigid moronic religious institutions and corrupt state governments

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  • Gary
    02/03/2018
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    Smart way to rip off the public, way to go California. Also is smart to keep your community high so they don’t know they are being oppressed, way to go California.

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  • Lee
    02/03/2018
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    Lead us, California. Don’t let this tired administration get in the way of our collective pursuit for happiness. As a psychologist - I have seen the wonderful benefits of cannabis use in my patients. It is a gift to be handled with responsibility. I cannot say the same for alcohol.

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  • Eli
    02/03/2018
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    This is absolutely necessary. Legalizing recreational marijuana means nothing until we make it legitimate. Providing marijuana businesses with basic banking services is a good way to bring the industry into light and safety. “Scandal and mismanagement” is what happens when millions of dollars are being handled in cash.

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  • C
    02/03/2018
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    Good idea. I know all you States rights enthusiasts will support this ...right?!

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  • Bluewitsend
    02/03/2018
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    Jeff Sessions needs to realize his refusal to recognize legalization of marijuana is in conflict with what states are trying to do and get the federal government onboard.

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  • Jeff
    02/03/2018
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    Please make this happen.

    Like (5)
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  • RadicalModerate
    02/05/2018
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    Please legalize weed, to restore trust in the government.

    Like (5)
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  • Azrael
    02/03/2018
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    Great idea but I need more info Do a state insurance similar to the fdic? Make all state funds run through same bank? I hope it works The less we depend on the feds for the next three years the safer we will be

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