With many banks unwilling to handle ‘weed money’ California is planning to establish ‘green banking’ to support the multi-billion dollar industry. If the plan actualizes, it would be the first such system in the golden state. Whether you would need marijuana delivery San Francisco or any other weed service in California, you are soon going to enjoy the benefit of a weed-friendly banking system.
Currently, the state government, federal regulators, and banks are engaged in talks to create a plan to grant banks permission to serve the cannabis industry. Many financial experts project that by 2020 California’s cannabis market will grow to approximately $7 billion. On January 1, 2018, California is set to officially legalize growing and sale of cannabis for both medical and recreational uses, and transform to a fully legal pot state.
According to state authorities, if banks won’t take in weed money, the pot sellers and other industry stakeholders will be undertaking large cash transactions, which may lead to robberies and violence. According to Peter Williams, deputy secretary and general counsel for the state Business, Consumer Services and Housing Agency, the high cash flow will pose a threat to public safety, and since the product has now been legalized, there is need for an urgent solution to the problem.
While at the moment the industry mainly transacts in cash, if banks are allowed to support it individuals will be allowed to buy with credit cards. You may soon be able to pay for your weed delivery San Francisco using a major credit card.Currently, banks have refrained from handling weed industry proceeds because the federal law has illegalized it.
Over the past few weeks, representatives of California Governor Jerry Brown have silently met several executives of 65 credit unions and banks to discuss how they can create a weed-industry-friendly financial system. The major setback for this plan is the financial institutions have to comply with federal banking regulations, and one way to ensure this is subjecting the marijuana industry money to unique oversight, tracking,and transparency.
According to the green banking proposal, a central correspondent bank is to be chosen to hold all marijuana trader accounts from other banks that support the cannabis industry. If a weed trader wants to pay a vendor for a product, the transaction will go to the central correspondent bank for clearance via the vendor’s bank. Other measures will also be put in place that will add transparency to the system and make it look favourable to the federal authorities.
William said that a number of banks have expressed interest in the deal. The state is waiting on the boards of directors of the interested banks to make voluntary participatory decisions. The banks will make independent decisions to design the green banking network with contracts. Williams said that this deal will not take legislation.
The green banking is system is closer to becoming a reality than ever. But we hope the federal government will soon change its position on classification of cannabis as a drug.