California considers Creating Bank for Marijuana Businesses

Posted by Sagar Satapathy on February 01, 2018.

California is considering setting up a state-owned bank for its newly legalized marijuana industry, which it says has to operate mainly in cash due to federal regulations blocking access to traditional banking.

State Treasurer and Democratic candidate for Governor John Chiang on Tuesday announced his office will study whether California should create a state bank to serve California’s newly legalized marijuana industry.

“We are contending with the emergence of a multi-billion dollar cannabis industry that needs banking services,” Chiang said. “We all know the lack of banking services affects government taxes and forces the cannabis industry to operate in cash.”

“The state of California estimated $1 billion of tax revenues. We don't want to create a shadow economy, we don't want violence in local communities," he claimed.

However, Chiang’s Democratic rivals in the Governor’s race, Lt. Gov. Gavin Newsom took a dig at him soon after the announcement.

Newsom’s campaign manager Addisu Demissie criticized Chiang for not endorsing Proposition 64, which voters approved in 2016 to legalize recreational marijuana.

“John Chiang went out of his way to avoid endorsing Prop. 64 and virtually every other criminal justice reform ballot initiative since he's been a statewide office holder," Demissie said in a statement.

Currently, the Bank of North Dakota is the only deposit-holding, publicly owned financial institution in the US. It was created in 1919 to provide loans to farmers.

On January 1, California legalized marijuana for recreational purposes. Adults aged over 21 can now possess up to one ounce of pot and grow up to six plants at home in the State.

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