Will California Create A State Bank For The Cannabis Industry?
Legal banking solutions may come from the State of California as they are considering creating a State bank for the industry. From their perspective, it makes sense they would consider this, the State is already collecting tax revenues from the sale of cannabis, now they may create a State-owned bank that will facilitate transactions. The article below states that the bank will be owned by the State and not private enterprise like most banks currently are. Taking control of cannabis banking just helps the State top up the coffers for the Treasury, this on top of the ridiculous amount they already tax on it.
http://www.latimes.com/business/la-fi-cannabis-bank-chiang-20180130-story.html
Governor candidate John Chiang (currently the Treasurer) said his office will look into what would be involved in creating a State-run bank for the marijuana industry. They are considering things like costs, regulation and other operational issues that would need to be considered before creating such a bank. If this banking entity is created, it would be one of just two in the nation, the other being the Bank of North Dakota.
While I am all for free markets and private enterprise operating in the cannabis industry, a State-run bank which is publicly owned may not face as much federal oversight and regulations than a private bank for the industry. Jeff Sessions had made it clear that they may come after the cannabis industry, so the State of California and it's bank may provide some relief and protection from Federal prosecution for cannabis businesses and the money held at the bank.
With all the cash being dispersed in the industry, the State of California is looking to create their own banking solution and I am sure many other States will follow. Many will argue that the banking should be left to the private sector or possibly to the Crypto space, but that would be a challenge on many fronts at the federal level. If the individual States create a banking system, then the risk is upon them to deal with the Federal Govt.
Whether or not the industry in the US needs a banking system, one that is hopefully out of the Federal Gov'ts hands... some will say that Crypto Currencies and Blockchain solutions could alleviate that problem. However, I just can't see the bankers allowing the Crypto space to take over an industry like Cannabis, especially with all the regulations in place.
Eventually, we knew the bankers would try and control the flow of funds in the Cannabis space (most of the big banks like HSBC already launder Cartel funds), now they are going to try and do it legally.
If this comes to light, then the need for a Cryptocurrency as a payment tool diminishes, that is what I have been saying for a while. The industry doesn't need another crypto token for payment of weed, cash and current cryptos already can facilitate that. What the Crypto space needs are real use cases that solve or improves business processes, record keeping or B2B/B2C transactions, a blockchain that is open and transparent. That is what we are working on with the Cannabis Internet. Payment tokens will have a good use case for other aspects of this industry, but one that's sole purpose is for payments really doesn't add value or fill a need. I will be writing a lot more about this in future posts on Steemit.
If only the government's around the world would just decriminalize cannabis versus legalizing it, then we could develop solutions, build businesses and participate in the cannabis industry without fear of prosecution. For now, we are getting legalization which is just another form of control, but at least it is some progress.
I am a free markets guy, but I do realize the banking sector is eyeing the industry if not already participating in it. In Canada, many banks and credit card companies already deal with Licensed Producers and process transactions. Bank of Montreal is the first bank to start investing in the licensed producers, I suspect we will see many more banks in Canada start funding deals. We have yet to see major fund managers, Institutional money or Sovereigns start participating in the sector, that is still coming... which is why I think the Cannabis industry still has tremendous upside when it comes to investing.
What are your thoughts, should the Banks in the US be allowed to operate in the cannabis space or do we leave it to the Free Market?
Vin Maru, Editor at www.investinmj.com
More Cannabis News:
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Canada’s marijuana mania is giving financial firms a contact high, even before it’s fully legal -In the run-up to Canada's planned legalization of recreational pot this summer, cannabis companies such as Canopy have been on a fundraising tear
Police release bodycam footage of Oklahoma marijuana raid that killed 72-year-old woman
CannaFacts
Here is a chart showing cannabis consumption and pricing from some of the major cities around the world. Source
CannaFacts: in my env. its 7.50 - 10 €/g and still illegal... most bad side effect ?! beeing a potheat is expensive and you always feel hunted... that sux ! Sure, im mentaly addicted by weed, but its pretty harmless against other drugs - legal or illegal - like alc... ;) and alc is damn dangerous and addictive. Greetings from germany, where potheads are hunted :(
@enigma4 Yes Alcohol is much more dangerous and addictive than Cannabis, just use it responsibly.
Germany has to be one of the strictest countries in Europe when it comes to Cannabis. I met a lobbyist/activist in Prague back in November and he had a discussion about it, he is working hard to help create awareness with the government there and around many European countries. Hopefully, you don't get caught in the hunt.
Thats so true, But as the past is showing... prhib. wont work out and only criminals are the winners. If germany and some other countries are aware of the money flow to the gov. Someday the will admit!
Yea mate, i hope also. You got a new sub ;)
Good read.... and tough question. I almost want to video discuss with you. I'm all for a free market too and #taxationistheft if you ask me BUTTT things are the way they are and I don't want to see cannabis excluded from the mainstream banking system because it screams discrimination. Crypto currency scares me for all the typical reasons but let's be real... even money isn't really money, just a promissory note. IDK, in a perfect world, they would regulate cannabis just like tomatoes then the need for wanting to use CC out of fear of the capitalistic monster wouldn't be there and we could all breathe a little easier (or a little smokier)
I've heard rumor the the UN is discussing announcing it's stance on decriminalizing cannabis globally so hopefully that will help. They (govt) just need to be sure that the is language that protects small home grows who are only growing to provide for themselves and also small businesses who want to grow, like local winery's and craft breweries do. Regulation wise.... I think it will take a lot of time to get through all the red tape but at least we're taking steps forward!
@gimaryjane, Unfortunately, Governments and Banks will have a significant role in the cannabis industry, that is the only way legalization will come about... they want their piece of the pie too. The industry will move forwards and Cryptos & Blockchain tech will have its place in the sector. I am excited to be a part of it, we all can participate in the Cannabis Internet.
Corporate greed and government deceit will always be a reality... From what I've seen in the cannabis community cost to cost, no matter what "they" do, the community will always find a way to thrive and heal.
@vinmaru, again thanks for the continued weed info. Hey I’m in California right now, been in this state since September last year when an oil vile was $25 and an Oz was $140 at the same shop. Now that it’s ‘legal’ here, that vile costs $49 and that same Oz is $195. When I asked about the increase, the shop got a good laugh and I was told the state tax remained the same and since it’s ‘legal’ now, there’s an additional 17% tax on top of the 10%! Ridiculous, if you ask me. Not only that, but since it’s ‘legal’ now, it’s officially Illegal to carry the bag on the sidewalk when you exit the store to go to your car.
Am I missing something here? The law made it legal and coincidentally made it illegal to possess, illegal to smoke and doubled in price.
Sorry for the winded response but ever since January 1st, the industry around here has gone to sh.... poop. I guess my question to you would be:
How long do dispensaries stand a chance to keep their doors open now cuz I sure won’t visit them anymore? That goes for most everyone I know as well. Thanks for reading!
Califonia has to be the worst state when it comes to taxes... I made some comments about the price of weed in Cali on a LinkedIn thread. Even in Canada, we expect a pretty hefty tax on "legal weed", looks like in Ontario we are going to be paying 13% HST tax and $1 per gram, so on a $10/gram price, the final could be $12.30. We won't have dispensaries in Ontario, the distribution will be done by a gov't agency/company "Cannabis Control Board of Ont", so they will make the markup from wholesale to retail.
Cannabis growers and dispensary operators won't be making much money from "Legalization", the governments will make the most. In the US, it could be worse... even if a legal business can tweak out a profit, there is always the risk that the Fed will come in and take their cut in "taxes" or theft by Jeff Session's Pot Posse. They will stay open as long as the owners have money or investors realize there is no real % return or upside on their money, but for now the money is still flooding into the sector and will continue for awhile.
This is why the grey market will continue and possibly even thrive. The best thing anyone can do is grow for themselves, or find a good buddy who is growing. HomeGrown is probably better than any "legal" weed, and this way you are not supporting "The Man" with more tax money.
Thanks, Nailed it! Dispensaries have been convenient for about a year, strictly a convenience and now they’re not even that anymore.
Ps - Jeff Session’s has a gravity bong in seltzer water that’ll put you to sleep!
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