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News & Press: Industry News

California Marijuana Bank Looks Unlikely

Tuesday, February 19, 2019  
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Last month California marked the start of legalized sale and use of marijuana although the new law grants local government significant control over participating businesses. Yet, because marijuana is still illegal under the federal Controlled Substances Act, the pot industry continues to encounter problems finding banking services. In response, California commissioned a feasibility study to decide if it made sense to have a state-owned bank offering services to pot businesses.

The study concluded that a state-operated bank to service the pot industry was not feasible. The study cited large startup costs, losses if the federal law changes and banks compete, or potential regulatory and criminal actions if the federal government decided to aggressively enforce federal law. With federal law prohibiting the sale of marijuana it is even difficult to imagine that the federal government would allow access to the banking system necessary for a state-bank to operate. Although state legislation may attempt to solve the issue, California leaders seem to accept the reality that a practical solution requires changes at the federal level.

California Land Title Association

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