A State Senate committee approved a bill April 18 to allow cannabis business owners to start a limited charter bank in California.
Senate Bill 930 was introduced in January by State Sen. Robert Hertzberg (D-Van Nuys) to improve business operations for dispensaries and other suppliers to the cannabis industry as well as address public safety issues as the businesses won’t be handling large amounts of cash. The senate Banking and Financial Institutions Committee passed the bill 7-0 and then referred it to the Governance and Finance Committee.
If made into law, the bill would allow for the creation of limited charter banks and credit unions licensed by the Department of Business Oversight. The institutions would be serve two purposes – holding and accepting cash for its account holders; and issuing special purpose checks to the account holders, according to an analysis of the bill for the banking and financial institutions committee.
“A cannabis business with an account at a (limited charter bank or credit union) will be able to use special purpose checks, rather than cash, to pay taxes and to pay for certain products and services, but only if the entity to which the cannabis business presents the special purpose check wishes to accept it,” the analysis said.
“If we assume that the state and some local jurisdictions will agree to accept special purpose checks for the payment of taxes (something not yet authorized or required), the most obvious advantage to the system envisioned by this bill is the increased ability of cannabis businesses to pay their state and local taxes, without having to physically carry large bags of cash into state and local taxing agencies,” the analysis continued.
Mark Madler is a reporter with sister publication San Fernando Valley Business Journal, where a version of this article first appeared.
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