State leaders looking into public bank for cannabis industry

State leaders looking into public bank for marijuana industry

The cannabis industry deals mostly in cash. This could potentially make these businesses as targets for robberies. 

Many are also concerned after Attorney General Jeff Sessions announced intentions of repealing Obama-era guidelines that didn't interfere with states that legalized pot. 

California leaders are now thinking about a public bank, that could help with the industry, and give more protection. 

"Banking is pretty much impossible," said Kenneth Churchill, CEO of West Coast Cannabis Club.

While profits have been steady for Churchill, he says they've also been a challenge

"We're lucky enough to be able to use an armored car service that comes up and picks up deposits from us, and takes it to a central vault," Churchill said.

Not having a bank account, rolling out concerns for security, and fellow employees. 

"Things like running payroll, making sure that all of our employees are able to receive a paycheck, rather than just cash. and being able to give them paystubs," Churchill continued.

State leaders are hoping to help Churchill and others in the cannabis industry, with state treasurer John Chiang and the office of Attorney General Xavier Becerra looking into a state, public bank. While the drug still remains illegal on the federal level. 

"Financial institutions that have to comply with federal laws and state laws have to comply with the appropriate regulatory agencies, are in a pickle. They are trying to make sure that they don't get their charters taken away," Chiang said.

Chiang says the operational portion of the study will focus on things such as how the bank will be funded, and if it'll be online or at a brick-and-mortar location.

"The ATMs, physical locations, deposit functions, funding functions, what would it encompass if the state proceeded with a state bank," Chiang said.

Desert Hot Springs police chief Dale Mondary is for the idea providing more security not only for companies but cities too.

"If somebody decides they're going to try to hijack a deposit at some point in time. When the businesses actually bring cash to the city, they may bring thousands of dollars at a time to pay their fees. to pay their taxes," Mondary said.

It's an idea Churchill says will help in the short-term and hopefully bring change for the future.

"I think it's something we're going to be dealing with until one of these big banks decides to be the first to help us out with this or until it's rescheduled from a schedule one narcotic," Churchill said.

Chiang says the Attorney General's office will be looking at the legal portion of this study. His office issued this request for information, where they'll be talking with experts from different backgrounds on whether to open this new bank. He says they hope to complete the study by the end of this year. 

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