California State Treasurer John Chiang today released a report containing his Cannabis Working Group's recommendations for how the state can help address the banking needs of the soon-to-be-legal CA pot industry. One of his four main recommendations is:
Conducting a feasibility study on creation of a state-owned bank to provide financial services to the cannabis industry. The study should include costs, benefits, risks, and legal and regulatory issues including capitalization, deposit insurance and access to interbank transfer systems.
Chiang's recommendation is important because it allows the state to move forward on a feasibility study quickly without needing the legislature to approve it.
The story was covered by James Rufus Koren in the LA Times: "One recommendation, which was promoted by many in the cannabis industry as well as social justice groups, is that the state look into the creation of a public bank. A bank owned by the state of California, the thinking goes, could provide banking services to cannabis companies and also offer an alternative to profit-driven Wall Street institutions."
While there are indeed many legal hoops to be considered specifically for cannabis businesses, it's very significant that a Public Bank has been elevated to this level of attention as a potential solution by a current sitting Treasurer who is also running for Governor.