Cannabis Banking Fix Clears Key Hurdle, Heads to Assembly Floor
Hertzberg plan to create private limited charter banks for the cannabis industry reaches furthest point in two years of legislative efforts
SACRAMENTO – Senate Majority Leader Bob Hertzberg (D-Van Nuys) today applauded the decision of the Assembly Appropriations Committee to clear SB 51 for a vote on the Senate Floor.
SB 51 would establish the framework to allow licensed cannabis businesses to open bank accounts. Despite the legalization of cannabis in California, it remains illegal to bank because of its federal classification as a Schedule I drug. As a result, cultivation, distribution, and retail businesses alike have been forced to operate on a cash-only basis. This is impractical from an accounting perspective, and it also presents significant public safety issues.
“It has required creative thinking to figure out how to move forward into this uncharted territory, and this option not only works, but it’s the only option left on the table,” said Senator Hertzberg. “After over two years of working on this, one thing has been crystal clear: everyone agrees on the urgency of this public safety issue.”
The system envisioned under SB 51 would create an environment where private banks could apply for a newly created limited-purpose, state-chartered bank license that doesn’t interact with the federal system, allowing cannabis-related businesses to open accounts and deposit income.
“I’m proud and appreciative that the Committee decided this is a viable solution,” said Fiona Ma. “With minimal progress on the federal level, it’s clear California must lead on this issue.”
Last year, SB 930, legislation that promoted the same concept, stalled in the Assembly Appropriations Committee. SB 51 next heads to the Assembly Floor for a vote before heading back to the Senate for concurrence and the Governor’s desk.
Media Contact: Katie Hanzlik
Senator Robert M. Hertzberg
Capitol Building, Room 313