Most cannabis business owners eventually confront the stresses of working in an all-cash environment. If you’re lucky, you’ve found one of the 368 reported banks or credit unions providing limited services to the industry under FinCEN guidelines. You might be experimenting with more exotic solutions like cryptocurrencies or pre-paid services like Tommy Chong’s Green Card. In the past few months, a bold new financial project has re-emerged from Occupy-inspired economic circles to captivate city councils, state treasurers and weary cannabis industry entrepreneurs: the public bank.
A public bank is a bank fully owned and operated by the state or municipal government within which it operates. Instead of depositing its money in a third-party bank owned by private interests and insured by the FDIC, the state or city deposits and insures the public bank’s money and builds up its own assets. A public bank can choose whether or not to engage with the Federal Reserve system, which means it could possibly provide a suitable home for the cannabis industry’s cash.
A lot of the action around public banking and cannabis right now is happening in California. The state’s Cannabis Banking Working Group, chaired by State Treasurer and gubernatorial candidate John Chiang, devoted an entire session to the public banking option on August 10th.
Click to read the entire post on Leafly.