Senator Bob Hertzberg, D-Van Nuys, introduced legislation supported by Board of Equalization member Fiona Ma, CPA to help financial institutions safely conduct transactions with cannabis businesses. SB 930 would allow financial institutions to work with licensed cannabis businesses to do the following:
- Issue certified checks and conduct payroll for certified California employees;
- Pay their state and local taxes and fees while lessening the burden on local government to collect and manage large sums of cash;
- Pay their rent; and
- Invest in California’s economy.
Despite the legalization of adult-use cannabis in California, eight other states, and the District of Columbia, the U.S. Drug Enforcement Administration still classifies cannabis as a Schedule I drug. Because of this, legally licensed cannabis businesses are not able to deposit their business income with federally-insured banks, and are therefore forced to operate as cash-only businesses. This poses safety risks to those legitimate businesses and creates challenges when they need to make business or payroll transactions, or pay taxes and fees.
“Now is the time for California to take action since U.S. Attorney General Jeff Sessions has thrown down the gauntlet,” said Board of Equalization Member Fiona Ma, CPA. “With Prop 64 now fully in effect, the cannabis industry is poised to become one of the largest cash-based industries in California projected to generate $8-20 billion dollars a year. Paying your taxes with duffel bags full of cash isn’t safe or efficient for anyone involved, but this is the reality for those legally working in the cannabis industry. There has to be a better way and I’m proud to partner with Senator Hertzberg to create a safe payment processing system for this industry.”
“Proposition 64 allowed legalized recreational marijuana in the state, but did nothing to address the lack of financial services available to this industry,” Sen. Hertzberg said. “These businesses handle significant economic activity, yet they are forced to operate under the table and with little government oversight, as if they’re a black-market operation. This solution is how we will integrate these businesses into the fabric of the California economy.”■