A solution to California’s pot-banking problem: Its own central bank
California became the first state to legalize medical marijuana in 1996. And as of last month, recreational use of pot is also legal.
Now it’s time for the state to take another bold move: to fix pot banking.
Since pot remains illegal on the federal level, most financial institutions will not service cannabis businesses. But California, as the sixth-largest economy in the world, can get more creative.
Previous efforts to bank cannabis companies have failed because of their inability to get master accounts with the Federal Reserve — and yet it’s a strategy California officials and others keep weighing. For example, California’s State Treasurer John Chiang has convened a cannabis group whose proposal hinges on getting a master account from the Federal Reserve. Already, commentators have concluded that their efforts are in vain.