California cannabis banking bill shelved — for now
The author of a California bill that would create a separate category for banks and credit unions to handle cannabis cash shelved the bill until next year, saying in a statement the legislation needs work on the details before it can go forward.
The bill passed a senate floor vote and the Assembly Business and Professions Committee before it headed to the Assembly Appropriations Committee.
Senate Majority Leader Bob Hertzberg (D-Van Nuys) announced Monday that he will not be advancing the bill, SB 51, this year. A statement from his office said he “emphasized his commitment to work together with sponsor Fiona Ma and the Governor’s Office to iron out necessary clarifications and implementation details.”
“If we’re going to do this, we have to do it right,” Hertzberg said in an emailed statement. “We owe it to the dozens of cities, counties, and cannabis industry officials who have been supporting this effort to see it through.”
The bill would permit private banks and credit unions to apply for a limited-purpose, state-chartered bank license that doesn’t interact with the federal system, allowing licensed cannabis-related businesses to open accounts and deposit income, according to the statement from Hertzberg’s office.
“The Majority Leader intends to move the bill when the Legislature reconvenes in January for the second half of the 2019-2020 Session. Because the bill contains an urgency clause and has already cleared a majority of legislative hurdles, there remains a path for it to go into effect in early 2020,” his office added.
The bill is in response to the difficulties cannabis businesses face in accessing banking services since their product is still illegal at the federal level.
During an assembly committee hearing on the bill in July, Hertzberg said many companies have to resort to using cash, creating a public safety threat. “Senator (Mike) McGuire informs me … there’s $2 billion buried in Northern California in barrels,” he said.
Hertzberg said during the hearing he was offering the idea as an alternative to “cockamamie” attempts last year to create a publicly-owned bank for the cannabis industry. A feasibility report prepared by the Cannabis Banking Working Group said the idea would take too much time and money to execute.