California Senate Passes Urgent Fix to Cannabis Banking – So What’s Next?
California Senate passed an urgent fix to cannabis banking that would disrupt the Federal banking system and allow the industry to bloom. But we’re not there yet. Here’s the latest on CA SB51 and where it is in the process of becoming law.
The California Senate voted to pass a bill on May 22nd that would clear the path for limited state-chartered banks to provide cannabis banking services. The proposed law would weaken federal prohibition in The Golden State and strengthen the ability for cannabis companies to conduct business normally.
The bi-partisan bill went through its 3rd reading on May 22nd with an urgency clause, as follows:
An act to amend Sections 99, 185, 301, 329, 1003, and 14001.1 of, and to add Division 2.5 (commencing with Section 11000) to, the Financial Code, relating to financial institutions. institutions and declaring the urgency thereof, to take effect immediately.
It then went up for vote with ALL 38 California Senators present (28 Democrats and 10 Republicans) who passed the Bill with 36 votes. That left just two who were unwilling to jump on the cannabis money train, predictably from the Republican camp. These were Sen. Morrell, Mike [R] who cast the single nay vote. And Sen. Borgeas, Andreas [R] who abstained from voting. Senator Morrell, who is a member of the Banking and Financial Institutions Legislative Committee, represents District 23 which includes rural Lake Arrowhead up to Beaumont and Hemet in Riverside County (a growing area for cannabis industry). Senator Borgeas, who is a member of tobacco lobby groups, represents District 8 which includes rural towns bordering Fresno into Yosemite.
CA SB51 Current Status
Bill Title: Financial institutions: cannabis.
Spectrum: Moderate Partisan Bill (Democrat 8-2)
Status: (Engrossed) 2019-05-22 – In Assembly. Read first time. Held at Desk.
Updated May 28, 2019. Track the progress of CA SB51 on LegiScan.
What Does CA SB51 Accomplish for Cannabis Banking?
According to thefreethoughtproject.com, the Federal government has used banking laws as a weapon in its unconstitutional war on state legal cannabis by making it impossible to access the banking system.
“With the passage of SB51, California could just bypass the entire federal banking system and its regulations, and create a self-contained banking network for the marijuana industry. With the passage of SB51, California could just bypass the entire federal banking system and its regulations, and create a self-contained banking network for the marijuana industry.”
SB51 is a huge step away from the war on cannabis. The cannabis industry – and that includes any product or service “cannabis related” – has literally been a cash business. Being forced to transact only in cash puts everyone at risk from the location taking and storing cash, to vendors driving away with cash, to employees who can’t even receive a normal paycheck. The government’s job is to protect its citizens and this constraint on banking only puts people in danger. No hard working person should be afraid of being robbed walking to their car on payday.
It will not, however, wave a magic wand so that you can pay by credit card at the dispensary. Keep dreaming… The proposed law would allow cannabusinesses to make deposits with check writing for limited purposes. The special purpose checks will run independently from the federal ACH automatic clearing house. The cannabis limited charter banks and credit unions would have stringent oversight.
What Steps Remain in the Process?
The process is still in the early stages. When a bill is read the third time it is explained by the author, discussed and voted on. Bills that require an appropriation or that take effect immediately, generally require 27 votes in the Senate (check) and 54 votes in the Assembly to be passed. Next step is the Assembly. The California State Assembly is half of the state’s Legislature. It has 80 members—twice the number in the state senate, the other half of the Legislature. If the bill is approved by the house of origin, the procedure is then repeated in the other house. Once it has reached all agreed upon amendments, the final resulting bill is returned to both houses for a vote, then goes to the Governor. The Governor can sign the bill into law, allow it to become law without his or her signature, or veto it. A governor’s veto can be overridden by a two thirds vote in both houses. Most bills go into effect on the first day of January of the next year. Urgency measures (which CA SB51 is marked) take effect immediately upon becoming law. Source: California Legislative Information
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