California Mulls Over Creating Public Bank to Process Marijuana Cash

In the wake of a tightened federal grip on U.S. states, which have already legalized marijuana, California’s state treasurer and the attorney general is studying whether his state should introduce a publicly-owned bank to process marijuana transactions, the Los Angeles Times reported on Tuesday.

California on Jan. 1 became the largest U.S. state ever to legalize marijuana. In early January, however, U.S. Attorney General Jeff Sessions decided to reverse a rule, allowing federal intervention within states that have allowed marijuana, making cannabis cash processed by banks unlawful.

On a conference call Tuesday, State Treasurer John Chiang, who is also a candidate for governor, said his office will look into costs, regulation and other operational issues California would need to consider before creating such a bank, the daily reported.

If the bank is formed, it would be one of just two in the United States. So far, there is only the Bank of North Dakota, which is public.

Chiang said the office of Atty. Gen. Xavier Becerra will study the legalities behind conceiving such bank, which won’t be owned by private investors but by the public.

The treasurer said the study will address whether the bank will have a physical entity or goes fully online, how it would be funded initially, and if its deposits could be insured.

Introducing such bank is to protect public safety, Chiang argued.

He said:

“California and other states will need to lead when it comes to bringing the cannabis industry out of the shadows so that it can be properly regulated to prevent sales to minors, to protect the public’s health and safety and ensure cannabis businesses behave as legitimate, tax-paying members of our economy.”

He also criticized Sessions’ latest move.

He said: “The recent action taken by Atty. Gen. Sessions threatens us with new national divisiveness and casts into turmoil a newly established industry that is creating jobs and tax revenues.”