Should California Create a Public Bank for Cannabis Businesses?

California Treasurer John Chiang announced he and the state attorney general’s office will study the feasibility of creating a public bank for the marijuana industry.

California Treasurer John Chiang announced he and the state attorney general’s office will study the feasibility of creating a public bank for the marijuana industry. (Justin Sullivan/Getty Images)

California is starting to assess whether a public bank would better serve the state’s marijuana industry.

On Tuesday, California Treasurer John Chiang announced that he and the state attorney general’s office will be moving forward with a feasibility study.

Most private banks won’t work with cannabis businesses because marijuana use is illegal under federal law. Chiang — who is running for governor — says California will conduct a two-part feasibility study on whether a state-backed bank would provide a viable alternative.


Chiang’s office would look at operational issues, like whether the bank should be online or have physical locations. He says the attorney general will consider legal questions.

“We need answers to legal issues surrounding the regulation of a state bank for cannabis, such as whether establishing such a bank would provide greater protection for the institution and its customers,” Chiang says.

The completed study is expected to answer questions about costs, benefits, risks, and legal and regulatory issues.

Chiang says the anti-marijuana stance of U.S. Attorney General Jeff Sessions creates some additional challenges to finding a banking solution for the industry. Chiang says California is collaborating with other states to encourage a federal fix.

California’s cannabis industry is expected to bring in billions of dollars in sales.

Most of the business is currently conducted in cash, which can attract crime.

Should California Create a Public Bank for Cannabis Businesses? 31 January,2018Katie Orr

  • george

    hay how about a credit union?

  • george

    how about a credit union works in garberville?

  • zO

    This makes no sense and only supports those that are in the new cannabis industry.

    We need to unequivocally and as speedily as possible completely unschedule cannabis from the Control Substances Act (CSA) which equals no more arrests and open business for banks with cannabis businesses.

    This is not rocket science and we don’t need American tax payers giving those in privileged more leverage to expand and grow their perspective businesses while others across the country in non-legal cannabis states continue to suffer arrest, imprisonment, tarnishing of records and breaking up of families.

    Time to stop the madness and end the unconstitutional prohibition of cannabis.

    This benign plant belongs in the hands of the people and scientist for its unknown potential of helping humanity.

    • Flatline42

      “We need to unequivocally and as speedily as possible completely unschedule cannabis from the Control Substances Act (CSA) which equals no more arrests and open business for banks with cannabis businesses.”

      Jeff Sessions thinks that cannabis is quite possibly the worst substance known to man, and I say that without hyperbole. Solutions at the federal level are not going to be forthcoming any time soon I’m afraid.

  • Flatline42

    Fascinating.

    I wouldn’t mind seeing a state-chartered bank for Cannabis also function as a source of microloans for small businesses to bootstrap. If cannabis brings in billions like it’s expected to, even a fraction of that would be an awful lot of money to use for microloans to plow back into the economy.

    It could be a really good opportunity.

Author

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

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