California’s Senate has passed legislation that will create state-chartered cannabis banks.

The legislation will help the industry get around restrictions on access to banking services and under the bill, private banks or credit unions can apply for a limited-purpose state charter so they can provide depository services to licensed cannabis businesses.

The legislation had an overwhelming approval of 35 to 1.

“It’s hard to imagine an industry that at this point is as large as, like, craft beer that does not have banking as we have come to know it,” said Steve Hawkins, executive director of the Marijuana Policy Project.

Senate Bill 51 still requires approval of the Assembly and California Gov. Gavin Newsom to become law.

“As policymakers, we have a duty to further the will of the voters while protecting the public safety of our constituents,” California Senate Majority Leader Robert Hertzberg said last month when introducing SB 51. “This measure is by no means the ultimate solution, but it’s just one small step in the right direction to get some of this money off the streets and into bank accounts.”

“It will improve commerce incrementally, but you won’t be able to get a loan from one of these banks,” said attorney Robert Selna of the Oakland, California-based firm Wendel, Rosen, Black & Dean. “It will help cannabis companies pay the rent, but how it corresponds with federal law is still a question.”

“Congress will have to act because there’s all the interstate ramifications of banking that just really cry out for federal lawmakers to do something in this space,” said Hawkins.


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