Sen. Hertzberg, who represents constituents in the Van Nuys area of the San Fernando Valley, is looking to address a systemic problem within California’s marijuana industry – access to banking.
On Thursday, California Sen. Bob Hertzberg (D-18th District), rolled out some potentially helpful legislation for the state’s swelling marijuana trade. Seeking to correct a lack of access to America’s financial institutions, the Senator’s bill would allow banks to conduct business with licensed proprietors in the state’s nascent marijuana industry.
SB 930, according to the Senator’s press release, would “integrate” California’s licensed marijuana businesses into the state’s $2.6 trillion economy.
“These businesses handle significant economic activity, yet they are forced to operate under the table and with little government oversight, as if they’re a black-market operation,” the Van Nuys representative explained.
By permitting licensed marijuana businesses to issue certified checks, conduct payroll, and pay their state and local fees and taxes in something other than cash – California’s newest industry will be intricately woven into the “fabric of the California economy,” according to Hertzberg.
California state Sen. Bob Hertzberg, D-Van Nuys, offers a path for the legal marijuana industry to have legit, regulated banking services. @SenateHertzberg https://t.co/Zlcn2p9XgO
— Mark Schwanhausser (@MSchwanhausser) January 25, 2018
While the passage of California’s Proposition 64 legalized the recreational use, cultivation, and sale of adult-use marijuana, SB 930 would finally create a state-chartered bank for the industry.
Fiona Ma, a CPA and member of the State Board of Equalization, views the issue as a matter of safety and supports the goals of SB 930:
“With Prop 64 now fully in effect, the cannabis industry is poised to become one of the largest cash-based industries in California projected to generate $8-20 billion dollars a year. Paying your taxes with duffel bags full of cash isn’t safe or efficient for anyone involved, but this is the reality for those legally working in the cannabis industry. There has to be a better way and I’m proud to partner with Senator Hertzberg to create a safe payment processing system for this industry.”
Although the City of Los Angeles accepts business tax payments in cash, California’s Board of equalization refuses to take America’s paper currency.
Main photo courtesy of Allie Beckett