It has long been a problem in the medical (and now non-medical) marijuana industry: Banks refuse to serve any business dealing with the Schedule 1 controlled substance because it’s illegal under federal law. As a result, dispensaries are forced to deal in hard currency, and some dispensary owners pay their sales taxes by hauling bags of cash into the offices of the California State Board of Equalization. The whole situation is apparently making everyone nervous.

In a meeting this morning led by Fiona Ma, our representative in the BOE, state officials are exploring possible solutions to that problem, including a state-run bank, of sorts, where growers and sellers could deposit cash, write checks and transfer funds. 

“We want to collect the taxes and audit these people efficiently,” Ma told the Sacramento Business Journal. 

North Coast Assemblymember Jim Wood will be in attendance along with banking industry professionals and representatives from several state agencies. The meeting is being held in part to brainstorm solutions before full legalization hits California, which is widely expected to happen with a ballot measure in next year’s election.

“After studying this issue for the last six months, I really feel that the federal government is not moving or interested,” Ma told the Sacramento Bee. “So I really feel like California needs to step up.”

Here’s a news release from Ma’s office:

Sacramento, CA. – California State Board of Equalization (SBOE) Board Member Fiona Ma will be convening a first of its kind meeting focusing on the challenges facing the cannabis industry in the banking arena. Industry experts will discuss the latest changes that have affected states like Colorado and Washington. The conversation will focus on exploring opportunities and recommendations for California. The meeting will take place on Friday, July 31, 2015 from 10:00 a.m. to 12:00 p.m.

California led the nation by passing Proposition 215:  The Compassionate Use Act in 1996.  As of April 2015, 23 states and Washington D.C. have legalized cannabis for medical use with seven states pending legislation.  However, the Federal Government still classifies “cannabis” as a Schedule 1 controlled substance which is illegal to possess in the United States.  As a result, banks and credit unions in California have been prohibited from doing business with any entity that is engaged in illegal activities. Thus, Medicinal Cannabis Dispensaries (MCD’s) in California are forced to find creative solutions that include bringing bags of cash to one of the SBOE offices each month to pay their sales taxes due. These transactions have the potential of creating a dangerous situation for the MCD’s, neighborhoods, law enforcement and SBOE employees. In addition, it is very difficult for the SBOE to audit cash related business transactions.

Board Member Ma will be joined by State Board of Equalization Vice Chair George Runner, Assemblymember Ken Cooley and Assemblymember Jim Wood. Representatives from the California State Treasurer John Chiang’s office, The Federal Reserve System, Assemblymember Tom Lackey’s office, and the banking industry will also participate.

Who: SBOE Board Member Fiona Ma, SBOE Board Member George Runner, Assemblymember Tom Lackey, Assemblymember Ken Cooley, Assemblymember Jim Wood, representatives from the California State Treasurer John Chiang’s office, and The Federal Reserve System.

What: Cannabis Industry Banking Regulations and Challenges – Stakeholder Meeting

When: Friday, July 31, 2015 at 10:00 a.m. – 12:00 p.m.

Where: California State Board of Equalization Headquarters
Board Hearing Room, Room 121
450 N Street
Sacramento, CA. 95814