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California Dreaming: Cannabis Cash, Public Banks—and the State’s Own Mini-Fed?

July 6, 2018

By Ellen Brown : truthdig – excerpt

As Ma explained in a May 17 article in the Sacramento Bee:

There are two types of banks—those with federal charters, and banks with California charters. Because cannabis is still considered a Schedule 1 narcotic, we cannot touch federal banking wires. We want state-chartered banks that are protected, regulated and certified under California law, and not required to be under the FDIC.

State income taxes, sales taxes, unemployment, workers’ compensation and property taxes could all be paid through a closed-loop system that takes in revenue from the cannabis industry, but is apart from the federal banking system. … Cannabis businesses could be part of a cashless system similar to Apple Pay, and their money would be insured by a state-licensed institution…

Spurred by the heavily cash-reliant cannabis industry, Los Angeles residents will be the first in the country to vote on a public banking mandate, after the City Council agreed on June 29 to put a measure on the November ballot that would allow the city to form its own bank…

The push for such a bank comes amid ongoing concerns involving the massive amounts of cash generated by the cannabis business, which was legalized by California’s Proposition 64 in 2016. Wesson has said cannabis has “kind of percolated to the top” of the public bank push, “but it’s not what’s driving” it, citing affordable housing and other key issues. He added the concept of a public bank should be pursued regardless of the cannabis issue…

State Board of Equalization member Fiona Ma, who is running for state treasurer, says California’s $8 billion to $20 billion cannabis industry is still operating mostly in cash almost two years after state legalization. She adds that the majority of businesses are operating on the black market without paying taxes. This is in large part because federal law denies them access to the banking system, forcing them to deal only in cash and causing logistical nightmares when paying taxes and transferring money…

In a surprise move in early June, President Trump announced he “probably will end up supporting” legislation to let states set their own cannabis policy. But Ma says that while that is good news, California cannot wait on the federal government. She and state Sen. Bob Hertzberg, D-Los Angeles, have introduced Senate Bill 930, which would allow state-chartered banks and financial institutions to apply for a special cannabis banking license to accept clients after a rigorous process that follows regulations from the U.S. Treasury Department. The bill cleared a major legislative hurdle when it was approved by the state Senate on May 30… (more)

Please read and comment on Truthdig. The more comments they receive the more of these articles they will run. This is an important issue that requires some careful thought and understanding.

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