Voice of San Diego
Marijuana might be legal in California, but banks and other financial institutions are still off limits to marijuana business owners. That’s because marijuana remains illegal in the eyes of the federal government. No access to banks means pot businesses go without basic finance operations, like opening a checking or savings account, wiring funds or accessing lines of credit.
State Treasurer John Chiang, who’s also a candidate for governor, formed the Cannabis Banking Working Group to explore options for banking and regulating a budding industry that some expect to produce more than $6 billion in sales by 2020. Its members include officials from the banking and cannabis industries, as well as politicians and law enforcement officials. The group met in San Diego on Friday.
Chiang said the lack of banking options have made paying taxes, paying vendors and employees, and granting benefits, such as health insurance, more difficult. Businesses have also been forced to deal in cash, often leaving workers left to carry money in duffle bags, an invitation for violent crimes.
Oceanside resident Gregg Marte, who runs a medical marijuana distribution company, told the group that several weeks ago, two men had pointed a gun in his face and ran off with five pounds of marijuana and $2,000 in cash.
“You know what, take it. My life is more important than the flower and that money,” Marte said.
Chiang said business owners shouldn’t have to decide between their safety and profit.
“Most of these problems are related to the cash-only economy that resulted in the cannabis industry’s inability to access money handling systems routinely available to other businesses,” Chiang said.
Colorado, which legalized recreational marijuana in 2014, is a few steps ahead.
Panelist Sundie Seefried, CEO at Partner Colorado Credit Union, led the creation of a banking system for Colorado’s cannabis industry. So far, through Seefried’s system, her credit union currently banks more than $80 million each month and $1 billion a year for Colorado’s marijuana industry.
But it remains impossible to bank with a marijuana business and remain totally compliant with federal laws. Seefried pointed out that one Colorado credit union was shut down by federal regulators for banking with cannabis businesses.
Republican Rep. Dana Rohrabacher, who represents Orange County’s coastal communities, attended the meeting and spoke against federal enforcement against marijuana businesses that are legal in their home states, calling it “a great disaster for the wellbeing of our country and the freedom of our people.”
Rohrabacher introduced a bill in February barring the Justice Department from enforcing federal marijuana laws in states that have already legalized recreational marijuana use. The bill is under review in the House.
After Chiang’s group wraps its tour, it will write a report of various options and solutions to remedy the marijuana banking issues.
Next steps will be up to state entities like California’s Department of Business Oversight and the Cannabis Regulatory Agency, the federal government and the banking and cannabis industries, said Marc Lifsher, communications director for Chiang.
“We’re trying to solve the problem but we don’t have any direct regulatory control,” Lifsher said.
– Jonah Valdez