Editor's note: This piece originally appeared, in slightly altered form,
Now that California will have significant regulation of both its medical and adult use cannabis industries under the
It's hugely important that cannabis businesses in the nation's largest state be able to secure bank accounts (at a minimum). But will they be able to given the federal illegality of cannabis? Despite what
Because cannabis is federally illegal, most banks and financial institutions
Once Colorado and Washington legalized adult use cannabis in 2012 and the Department of Justice issued the "
Since California will have a ton of cannabis regulations under both the MCRSA and Proposition 64, I am confident some California financial institutions will take advantage of the 2014 Fincen guidelines and open accounts for cannabis businesses. This means that if you receive a California cannabis license under either the MCRSA or Proposition 64 (or both), you will likely be a good candidate for getting a bank account in California.
The main obstacle right now is that bank regulators like Fincen, the Federal Deposit Insurance Corp. and the National Credit Union Administration will likely withdraw even silent acceptance of cannabis banking if Sen. Jeff Sessions, President-elect Donald Trump's choice for attorney general, or someone else in the incoming Trump administration orders the nullification of the Cole memo. Without support from Fincen and other federal regulators, state-legislated resolutions on cannabis banking will likely fail. Colorado already tried this with a
On Dec. 2, California's state treasurer, John Chiang,
"Conflict between federal and state rules creates a number of difficulties for states that have legalized cannabis use, including collecting taxes, increased risk of serious crime and the inability of a legal industry under state law to engage in banking and commerce. ... We have a year to develop a system that works in California and which addresses the many issues that exist as a result of the federal-state legal conflict. ... Uncertainty about the position of your administration creates even more of a challenge."
Chiang also wrote in his letter that California may "exacerbate" the banking problem because California's cannabis economy is going to be so large.
The Department of Treasury has done a commendable job of preserving and defending its marijuana banking guidelines; Treasury Secretary Jack Lew has
Like everything when it comes to Trump's administration and cannabis, California will just have to stay tuned on the banking front.
Hilary Bricken is an attorney at Harris Bricken LLP.