SACRAMENTO (CBS13) — California’s cash crop will remain a cash-only industry, based on a new state-sponsored report revealed Thursday.
A private consulting company commissioned by the state treasurer’s office found a public bank for pot would be too risky in California.
Phil Blurton’s highly secured marijuana dispensary, “All About Wellness,” made big bucks last year. He couldn’t find a single bank to take any of that money, but he did pay tens of thousands of dollars in city and state taxes.
“They put my money in the bank but I can’t put my money in the bank,” he said.
The industry’s been pushing for a state-run bank long before California legalized cannabis last year.
“We’ve been kicked out of six different banks over nine years,” said Blurton.
But a new state report reinforces what they already knew, it’s too big of a financial risk.
“When they’re looking at risk, they’re not primarily concerned about the fact that they’re banning an illegal substance,” said William Roetzheim, founder and CEO of Level 4 Ventures, Inc., the company hired to prepare the study.
The report’s author told the state treasurer that there are other factors involved. First, a bank would be at risk of criminal or civil liability under federal drug and banking laws.
Second, the rapidly growing industry is too “high risk” for banks even if were legal. And finally, the penalties would be too severe.
So what’s the consulting company’s recommended alternative?
Perhaps the most popular idea is to set up an exclusive bank to provide services only to the cannabis industry. But even cannabis advocates have their doubts.
It’s one solution for the “Cannabis-Based Working Group” to consider. The 18- member group created by the state treasurer is focused on finding an answer to the state-federal conflict.
”Yeah I think there’s obviously a lack of experience when it comes to banking and financial institutions,” said Hezekiah Allen, a member of the Cannabis Working Group.
As for the owner of “All About Wellness,” he says he didn’t need a report to point out the obvious.
“It’s getting Congress and the Senate to reschedule it from a schedule one (drug) or not schedule it at all,” said Blurton.
Outgoing state treasurer John Chiang reiterated that, saying the federal government, “needs to remove cannabis from its list of banned narcotics.”