SAN FRANCISCO - There is a downer clouding the high over the legalization of recreational marijuana in California. The industry is expected to generate $7 billion a year, but where that cash can be stashed is still hazy.
The pot business is illegal under federal law and banks, subject to federal regulation are reluctant to open accounts. The fear is massive wads of cash will lead to violent crimes.
There have already been robberies of medicinal dispensaries. Henry Wykowski is a lawyer with the California Cannabis Industry Association. He says "someone is going to get hurt or killed. It's something that should not happen for the people who control the banking industry and congress to realize this is something that needs to be addressed."
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Strategies are now being discussed on both the state and local levels. California Treasurer John Chiang recently convened a working group that suggested opening a state backed financial institution as one option. San Francisco Supervisor Malia Cohen has set up a task force to consider a city-owned bank. It could serve small businesses including the cannabis industry.
"How do they bank and carry out their transactions in a safe and manageable procedure? Those are all very specific questions the municipal bank is looking to provide answers to," Cohen said.
Berkeley and Oakland are also examining the possibility of municipal banks.
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