[George Runner] – State Board of Equalization Vice Chair George Runner and Member Fiona Ma are co-sponsoring a resolution (AJR 25) that calls on the president and Congress to support policies allowing banks and credit unions to provide financial services to those in the medical cannabis industry.
Assemblyman Tom Lackey, R-Antelope Valley, is the author of the resolution, and Assemblyman Scott Wilk, R-Santa Clarita, is a principal co-author. It was introduced Thursday.
“Removing this barrier to the medical marijuana industry will go a long way towards improving public safety and bringing about greater tax compliance,” said Runner. “The current cash-based system is just too dangerous.”
Since the federal government does not recognize state laws legalizing medical marijuana, it’s nearly impossible for those in the cannabis industry to have bank accounts. The conflict between federal and state laws has also left financial institutions that serve cannabis-related businesses on uncertain legal ground.
“Regardless of your opinion on cannabis, the clear lack of financial services for medical cannabis-based businesses does not serve Californians well,” said Assemblyman Lackey, a former CHP officer. “The bipartisan support for solving this problem sends a strong message to Congress that the current system is not working.”
AJR 25 is co-authored by Assembly Members Bonta, Cooley, Jones-Sawyer, Wilk, and Wood.
TEXT OF RESOLUTION (as of June 25, 2015)
Introduced by Assembly Member Lackey
(Principal coauthors: Assembly Members Bonta, Cooley, Jones-Sawyer, Wilk, and Wood) |
| June 25, 2015 |
Relative to cannabis businesses.
LEGISLATIVE COUNSEL’S DIGEST
AJR 25, as introduced, Lackey. Access to financial institutions.
This measure would memorialize the President and Congress of the United States to support legislation that will provide a comprehensive solution to allow banks and credit unions to perform financial services for marijuana businesses.
DIGEST KEY
Fiscal Committee: no
BILL TEXT
WHEREAS, Cannabis use for medical purposes is legal in 23 states and is legal for recreational purposes in four states and in the District of Columbia. The expansion of cannabis businesses across the United States requires action from Congress and the federal government; and
WHEREAS, While many states have laws permitting various degrees of commercial activity using cannabis, it remains illegal under federal law. The conflict between federal and state laws has left financial institutions serving cannabis-related businesses on uncertain legal ground. Banks and credit unions are concerned that providing financial services for businesses selling a product that is illegal under federal law exposes them to possible charges of money laundering and drug trafficking; and
WHEREAS, Federal laws, including the Controlled Substances Act, the Bank Secrecy Act, and the Annunzio-Wylie Anti-Money Laundering Act, prohibit financial institutions from providing financial services to cannabis and hemp businesses. Directives from federal regulatory agencies such as the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency also prohibit bankers from accepting deposits from cannabis or hemp businesses; and
WHEREAS, In February 2014, the United States Treasury’s Financial Crimes Enforcement Network, or FinCEN, in coordination with the United States Department of Justice, also issued a memo outlining expectations for compliance with the Bank Secrecy Act. Despite this progress, remaining uncertainties under current federal law still prevent banks and credit unions from accepting cannabis-based businesses as customers; and
WHEREAS, The medical, retail, and hemp agricultural businesses are unable to accept credit or debit cards from customers because electronic payments are handled through the banking system. Therefore, transactions must be conducted in cash. Further, these businesses cannot deposit cash from sales into financial institutions. This is a major problem in California as many businesses now have hundreds of thousands of dollars in cash at their locations, which poses a public safety risk to businesses, employees, and customers; and
WHEREAS, The lack of financial services makes paying taxes to local governments and the California State Board of Equalization a challenge because tax payments must be made in cash by cannabis-related businesses, leading to hundreds of thousands of dollars in cash being brought directly into government offices. It is difficult for the State Board of Equalization to audit cash-based businesses, especially when records of wholesale transactions are not available; and
WHEREAS, Cannabis businesses cannot easily comply with California tax laws, which has led to a significant underpayment of revenue owed the state. In response, the State Board of Equalization launched the Cannabis Compliance Pilot Project in January 2015 to help determine both the degree of noncompliance with state tax law and the amount of lost tax revenue. However, state efforts alone cannot solve the problem; now, therefore, be it
Resolved by the Assembly and the Senate of the State of California, jointly, That the Legislature respectfully urges the President and Congress to support legislation which will provide a comprehensive solution to allow banks and credit unions to perform financial services for cannabis businesses without federal retribution. The current system that requires cash-based transactions poses a risk to public safety and leads to reduced collection of taxes; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the President and the Vice President of the United States, to the Speaker of the House of Representatives, to the Minority Leader of the House of Representatives, to the Majority Leader of the Senate, to the Minority Leader of the Senate, and to each Senator and Representative from California in the Congress of the United States.
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6 Comments
Hard truth is sitting in front of a cannibal shop and watching young teens putting their money together and one walks in and comes out jumps in a car laughing and takes off legal pot haha look at Colorado there homeless population has doubled since they legalized better think politicians
My bad pot shop
Is it the pot shops fault? Not entirely. Judgment call at the time……but to sit there watch them put money together and wait to see what they do? Well somebody needs a hobby…….. if it dosent affect you then don’t worry about! Chances are being that observant……. there are aspects in your life that could use that attention.
They’re using the wrong staff symbol, man.
I haven’t smoked in 30 years but have adult kids who do. I don’t want to see them face charges that could affect their futures. They have their med. licenses.
Just legalize it already.
Once I retire in about 7 years I might want to smoke again myself like the 1970’s.
I hope it will pass! Good job!