In less than two months, recreational cannabis becomes lawful for California adults.

Legal weed is expected to create a multibillion-dollar industry, much of it in cash. But because selling marijuana is still against federal law, a lot of banks won’t deal with cannabis businesses. Treasurer — and gubernatorial candidate — John Chiang says that makes things complicated.

“The simple act of paying taxes can be a nightmare for both tax collectors and taxpayers,” he says. “Government agencies must spend money and manpower on beefed-up security and counting and sorting piles of cash.”

In anticipation of the largely cash industry, Chiang on Tuesday released a report from his Cannabis Working Group, outlining how California can address the lack of banking.

Among the suggestions? Hiring armored courier services to handle the industry’s cash and studying whether the state should create a public bank for cannabis businesses.

But Chiang admits California can only do so much.

“The definitive bulletproof solution will remain elusive until the federal government removes cannabis from its official list of banned drugs,” he says. “Or Congress approves safe harbor legislation protecting banks that serve business from prosecution.”

A customer prepares to buy marijuana from a cannabis farmers market in L.A.
A customer prepares to buy marijuana from a cannabis farmers market in L.A. (FREDERIC J. BROWN/AFP/Getty Images)

Jim Araby is with the United Food and Commercial Workers Union, which is working to unionize the cannabis industry in everything from cultivating and manufacturing to dispensing. He says better banking practices would also benefit workers.

“A safe banking system that brings the industry out of the shadows means workers can enter the mainstream workforce, declare their incomes, pay their taxes and be recognized under the law,” Araby says.

Chiang is hoping a group approach might be more effective with the federal government.

He says California should join with other cannabis legal-states to lobby for changes to federal law.

Why Legal Weed Might Mean a Lot More Armored Cars on the Street 8 November,2017Katie Orr


Katie Orr

Katie Orr is a Sacramento-based reporter for KQED’s Politics and Government  Desk, covering the state Capitol and a variety of issues including women in politics, voting and elections and legislation. Prior to joining KQED in 2016, Katie was state government reporter for Capital Public Radio in Sacramento. She’s also worked for KPBS in San Diego, where she covered City Hall.

Katie received her masters degree in political science from San Diego State University and holds a Bachelors degree in broadcast journalism from Arizona State University.

In 2015 Katie won a national Clarion Award for a series of stories she did on women in California politics. She’s been honored by the Society for Professional Journalists and, in 2013, was named by The Washington Post as one of the country’s top state Capitol reporters.   She’s also reported for the award-winning documentary series The View from Here and was part of the team that won  national PRNDI and  Gabriel Awards in 2015. She lives in Sacramento with her husband. Twitter: @1KatieOrr

Sponsored by

Become a KQED sponsor