California’s experiment with legal recreational cannabis use by adults has had its share of growing pains. Tax revenues have lagged badly because of slow-moving permit processing for legal shops and a failure to crack down on illegal shops with much cheaper products. Proposition 64’s promise of “local control” over allowing marijuana sales is the subject of a court fight over state lawmakers’ decision to allow deliveries — even in cities and counties that oppose sales. And state Treasurer Fiona Ma suggested in June that Gov. Gavin Newsom wasn’t focusing enough on making the legal recreational marijuana industry work better — a premise that Nicole Elliot, his senior cannabis adviser, disputed.
Against this backdrop, State Sen. Bob Hertzberg’s decision to pull his cannabis banking bill for now to try to address still-unresolved questions about how it would work is a welcome display of caution. Senate Bill 51 would have allowed banks and credit unions to accept deposits from legal cannabis businesses and to provide them with “special purpose checks.” The Van Nuys Democrat said, “If we’re going to do this, we have to do it right.”
The central problem with cannabis banking remains the fact that marijuana remains illegal under federal law, making financial institutions reluctant to service an industry that federal regulators may consider improper or worse. That’s why congressional action to give the go-ahead to cannabis banks in states that have legalized recreational use (11 so far plus Washington, D.C.) is ultimately the best solution. But if Hertzberg can figure out how to come up with a workable state banking law, other states could follow, perhaps influencing the feds.
Editorial by The San Diego Union-Tribune
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