California looks to Trump administration for help on marijuana banking

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

With the legal sale of recreational marijuana a week away, local governments across California have adopted policies on where and when permitted legal sellers can operate, following the ground rules set up by Proposition 64 – the November 2016 state ballot measure legalizing pot for recreational use beginning Jan. 1, 2018.

But despite more than 13 months of lead time, state officials still haven’t figured out how to deal with a crucial problem: the fact that federally regulated banks can’t accept deposits or have any financial relationship with marijuana vendors or growers, given that pot sales and consumption remain illegal under federal law.

Cash-only medical marijuana dispensaries authorized by a 1996 ballot measure have long been plagued by armed robberies. With recreational pot sales expected to be a multibillion-dollar industry, pot-related crime could skyrocket.

Two separate proposals have emerged after what state officials say are months of discussions.

One under consideration by Gov. Jerry Brown’s administration seems a long shot given that it relies on the cooperation of the Trump administration – specifically Attorney General Jeff Sessions, who has opposed individual states’ efforts to legalize marijuana for recreational use.

The Los Angeles Times recently reported that the state had met with 65 banks and credit unions, as well as with federal regulators, about having one bank in California established as a clearinghouse for all marijuana-related accounts of various banks throughout the state. The “central correspondent” bank would process all transactions involving pot dollars.

Seeking assist from federal government after suing it 24 times

Brown administration officials appeared hopeful that this concept would go over well with federal regulators because, at least in theory, it would make it easier to keep close track of marijuana industry finances, and to spot suspicious payments or transfers of funds.

The problem for California is that this proposal is built on the presumption that the federal government wants to help the state – which has already sued the Trump administration 24 times. While federal regulators have met with state officials on the pot-banking issue, the final decision on whether to cooperate is up to Sessions. At a Nov. 29 press conference, he said his office was taking a hard look at rolling back Obama administration rules that let states allow recreational marijuana after basic public safety and health standards were met.

“It’s my view that the use of marijuana is detrimental, and we should not give encouragement in any way to it, and it represents a federal violation, which is in the law and is subject to being enforced,” Sessions said, according to the McClatchy News Service. “We are working our way through to a rational policy, but I don’t want to suggest in any way that this department believes that marijuana is harmless and people should not avoid it.”

Chiang: Consider setting up a state bank for pot transactions

The second proposal – touted by state Treasurer John Chiang at a Nov. 7 news conference – is to have the state study the feasibility of opening its own bank to deal with marijuana financial transactions. That was based on the recommendations of Chiang’s cannabis bank working group.

The group’s 32-page report also suggested California work with other states in setting up a network of such institutions. But the report noted the many obstacles to establishing such a bank, including the likelihood that it ultimately would still be subject to federal regulation and thus to Sessions’ objections.

Chiang told reporters at his November news conference that “a definitive, bulletproof solution will remain elusive” without changes in federal banking laws.

But the 2018 gubernatorial candidate said that “is not an excuse for inaction.”

This article was originally published by CalWatchdog.com

Comments

  1. This is how stupid Sacramento is, unable to be forward thinking, always partisan politics. Sacramento’s socialism, politicians believing their smarter that citizens and need full monetary control, now seek help. I hope D.C. realizes medical marijuana needs free market banking, same as any other big pharma firm.

    • THE CAPTIVE says

      I do hope that D.C DOES NOT back MARIJUANA -How simple to use FREE MARKET -then let the chips fall where they may. Jerry Brown has made this state the garbage can of already enough trash–we need to stop it and recycle the little bits that are salvageable. The CORRUPTION IS ENORMOUS -!

  2. DENNIS WOLLEN says

    DO NOT FEDERALLY LEGALIZE OR CONDONE RECREATIONAL USE OF MARIJUANA IN ANY WAY…….IT IS A ‘DRUG’ AND IS RESPONSIBLE FOR KILLING OUR YOUNG, AS WELL AS OLDER, CITIZENS….IF IT IS LEGALIZED AND ALLOWED TO GROW, IT WILL CONSUME OUR COUNTRY AND OUR CULTURE…….DO NOT LEGALIZE IT……PERIOD……I’VE USED IT, I KNOW OF WHAT I SPEAK…….IT’S THE WORK OF THE DEVIL………PURE EVIL…….

    • Dennis, please get yourself educated about marijuana. It is not responsible for killing “young” or elder citizens. It already IS legal. I’m retired LEO and have done extensive research into the subject. It’s not going to harm or kill anyone. It actually helps.

      Have a great day!

    • Amen !!

  3. This senseless cabal in Sacramento is just going to eat humble pie. They dream these wonderful ideas, but then, the things they cannot do they hope for assistance from those they despise and ridicule; Good luck with that.

  4. retiredxlr8r says

    Trump needs to tell California to take a hike!
    Brown is a hateful, despiteful old man that needs to be put in his place.
    California is NOT that big of deal in the Nation as a whole. America can do without her.
    Matter of fact, the borders are the responsibility of the Feds. I think they should shut down the Western border of the United States. No traffic in no traffic out. Coast Guard can see to that very simply.
    Brown can go pack sand.
    The world would be a better place without Democrats!

  5. First we demand arrest and prison for Baldy and get rid of sanctuary cities and all the illegals and corrupt people in the State –then Feds will talk–and Trump needs to kick sessions off the team

  6. The administration put their minds together and they still drew a blank.

  7. Andrew Kessel says

    Jerry & Co make a stupid mess of marijuana. They call it legalization. I don’t remember being limited to an ounce of whiskey that I could carry/have for personal use. Overtaxed, over-regulated, over-stupid.

  8. Moonbeam’s con has worked on millions of Californians many, many times over the years. I really hope that the present POTUS and his Administration enforce the illegal drugs laws and tell him to kiss off this time. The present Administration in D.C. has bent over backwards too much already for the California Deadheads as it is.

  9. Larry Graham says

    AG Sessions better stay on principle and law on this one!!! Any state that legalizes any narcotics, et al should have to deal with reality and not be given aid and comfort by the federal government, who, by the way is representing the people (not the people of just those states)…

  10. Susan and MJN, We live in an adjoining State and it’s usage was legalized this year and we have already had several arrests for under the influence of the Drug while operating a motor vehicle Not sure of how many deaths yet but like alcohol it will happen. Now in splitting hairs so to speak it is the individuals “fault” while operating a vehicle that will someone killed (if not already). This latest dumbing down of America was “sold” to our greedy politicians by a lobby representing the “Drug” interests as a cash cow for States Government tax revenue so that the fiscally irresponsible elected (?) could continue their Tax and Spend policy. Our elected politicians very seldom do anything really good for the people, only if it benefits the m.

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