San Francisco cannabis businesses may soon benefit from a public banking system, if two pioneering members of the city’s Board of Supervisors have anything to say about it.
Supervisors Malia Cohen and Sandra Fewer are pushing the idea of creating a municipal bank that would both curb the city’s use of large commercial banks and provide cannabis business owners with a safe banking option.
“This ongoing public banking discussion is coming at an important moment in our community,” Cohen said last week.
“In our long cannabis discussion, we have barely acknowledged that cannabis is currently an all-cash business — cash payroll, no banking, vaults of bills on the floors of retailers.”
This issue stems from the fact that cannabis is still considered an illegal substance at the federal level, which has discouraged traditional banks from working with cannabis businesses. Last month, California Treasurer John Chiang proposed the idea of a government-owned bank that would help address this problem.
Chiang, who is running for Governor, said a public system of this kind would allow for cannabis business owners to open bank accounts and pay their taxes.
“It is unfair and a public safety risk to require a legal industry to haul duffle bags of cash to pay taxes, employees and utility bills,” Chiang said. “The reliance on cash paints a target on the back of cannabis operators and makes them and the general public vulnerable to violence and organized crime.”
Thanks to Cohen and Fewer, San Francisco appears to be the first city actually acting on Chiang’s suggestion.
The Board of Supervisors will likely meet early in the new year - when recreational cannabis legalization will roll out across California - to discuss the proposal. If all goes well, San Francisco would become the first city in the country to establish a public bank.