Marijuana Money May Push California into Public Banking

Posted: August 25, 2017 in Uncategorized

Marijuana-related businesses face a funny problem: they make lots of money yet can’t securely put it in banks. The US banking system is nationally regulated and weed’s illegal under federal law, a Schedule I substance with no accepted medical use and a high potential for abuse, according to the Drug Enforcement Agency.

So cannabis-related deposits cannot be federally insured, and money is subject to seizure by the feds, making bankers and weed-related companies rightly dubious of doing business. Transactions are mostly in cash, which is stashed in pillowcases and floorboards. Now California is considering whether a state public bank could be a solution for a potentially very lucrative industry; marijuana is projected to bring the state over $6.5 billion in revenue by 2020.

State treasurer John Chiang on Aug. 10 met in Los Angeles with members of the Cannabis Banking Working Group he created in December 2016, after Californians voted to legalize recreational marijuana next year, to explore banking access for related businesses. In the state’s estimation, 70% of marijuana-related businesses don’t have bank accounts.

Chiang said a state bank would serve more than just marijuana businesses. Public banking is an increasingly popular idea since the Great Recession of 2008 among those dissatisfied by the private finance system in the US, he noted. A public institution would be beholden to state taxpayers and run by local treasury officials, able to issue low-interest loans for affordable housing or education, say.

The only public bank in the US now is the Bank of North Dakota, established in 1919 because farmers had difficulty getting loans through private banks under the federal system and the state’s main industry was agriculture. Deposits are insured by North Dakota, not the Federal Deposit Insurance Corporation, and not subject to federal regulations.

Others, like Colorado and Massachusetts, have mulled similar moves. . .

via Marijuana money may push California into public banking — Quartz

Comments
  1. Hope they do it. Every state should have their own public bank. They are more resistant to stock market crashes.

  2. Awesome. Fuck the big banks. I pray they all go under. 🙂

  3. Interesting the way change generates more change.

  4. Yes, isn’t it? The system as it currently exists only serves to generate profit for a tiny few – it makes no rational sense for the vast majority.

  5. I have a secret that no one knows. I’m not gay; I’m also not a tween rockstar or a serial killer. I don’t spend my days in hiding, although the nature of my hobby does require especial deliberation, payment in cash, and a fair bit of furtiveness. 

    By now you might have caught on: I’m a drug dealer.

    ..But is this only because society labels me as such? If we’re being specific, I grow pot. A lot of it. And my state is VERY hostile to folks life myself. 

    8:59 pm

    It’s hot. The whole fucking country, other than those being drowned by today’s natural disaster, is hot right now. The AC in my 20th-century house pleads with stagnant air. Asphalt, often uncompromising, expands aggressively in front of me as cars pass, each causing me to peak again through a blind-covered window. My heart rate slows somewhat. I sigh, breathe in smoke, and reflect on better days. I crush a bit of thyme and lift bleeding plant matter to my nose.

  6. Thanks for your comment, mobiledesertsky. It really gave me pause.

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