LOS ANGELES —California Treasurer John Chiang has formed a cannabis banking group to help marijuana growers gain access to banking.
Seventy percent of marijuana businesses do not have bank accounts, according to a year-old Marijuana Business Daily survey cited in the treasurer's handout on the issues.
California voters approved Proposition 64 on Nov. 8, which legalizes marijuana and levies a 15% tax on sales. But the federal government still considers marijuana to be a Schedule 1 drug under the Controlled Substances Act.
As a result, many banks and other financial institutions aren't comfortable providing services to marijuana-related businesses.
A discussion around bank accounts and making deposits at Chiang's first working group meeting in Sacramento evoked comments from marijuana growers and their advocates about fears of prison and being robbed, according to a release from the treasurer's office.
About 100 people attended the meeting.
"There is a dangerous, disruptive disconnect between state law and federal law," Chiang said in a prepared statement.
The disconnect makes it difficult for governments seeking to collect taxes, cannabis businesses seeking to use traditional financial services and banks to provide those services, according to the panel.
Chiang organized the working group last month after Proposition 64 was approved by voters.
The measure legalizes the recreational use of marijuana, but does not resolve the conflict with existing federal law. California banks and the now legal marijuana businesses are caught in the middle. The state replaced its existing medical marijuana law with one legalizing recreational marijuana.
Chiang deemed the federal government's stance on marijuana behind the times noting that Americans are increasingly supporting legalization while federal law considers it a crime.
Providing banking access to the marijuana business, the largest shadow economy in California, would bring millions of dollars into the state's economy, said Fiona Ma, chair of the California State Board of Equalization and a member of the Cannabis Banking Working Group.
In addition to Chiang and Ma, the 16-member working group includes representatives of the California Bankers Association, California Community Banking Network, California and Nevada Credit Union League, the California Employment Development Department, the state Franchise Tax Board, Department of Business Oversight, Bureau of Medical Cannabis Regulation, Business Consumer Services and Housing Agency, Attorney General, California Growers Association, California Cannabis Industry Association, California State Association of Counties, League of California Cities and the law firm of Clark Neubert, which represents the cannabis industry.
The Cannabis Banking Working Group plans to hold at least four more meetings around the state.