Pubdate: Sun, 16 Aug 2015
Source: Daily Democrat (Woodland, CA)
Copyright: 2015 Daily Democrat
Contact:  http://www.dailydemocrat.com/
Details: http://www.mapinc.org/media/3030

STATE-RUN BANKS FOR POT IS BAD BUSINESS

Medical marijuana has been legal in California since voters passed 
Proposition 215 in 1996. But federal law still classifies pot as a 
Schedule I drug, which the U.S. Justice Department defines as having, 
"no currently accepted medical use in the United States." That means 
the national banking system is supposed to be off-limits to medical 
marijuana dispensaries, which have to pay their state taxes in cash.

A recent editorial in the Riverside Press, noted that Board of 
Equalization Member George Runner "said a recent tax delivery to his 
district office in Sacramento involved about $200,000 in cash" 
because the grower couldn't use a traditional bank and write a check.

To get around that problem, BOE Member Fiona Ma is proposing a 
state-run bank, as described by CBS News San Francisco, "where 
cannabis businesses could make cash deposits and electronic transfers 
to the Tax Board. ... Ma says not only is the cash-only system 
dangerous, it's also hurting state coffers. California is losing out 
on millions of dollars in sales tax."

This is dumb and doesn't serve the state's interests or the interest 
of growers.

We need to start working on this matter now because as noted in 
recent stories for The Daily Democrat, people like Woodlander John 
Wright are starting to plant and commercially harvest marijuana that 
is used in the medical field. Wright has been diligent about 
following the rules, has involved law enforcement officials and state 
officials in being sure all the Ts are crossed and Is dotted in 
growing marijuana. But unless there are changes, it will be a 
cash-only operation, which puts him and his clients at risk.

Harvesting at Wright's one-acre marijuana farm began last week with 
people snipping buds, separating the stems, and culling out excess leaves.

Specifically, the type of marijuana planted on the property has a 
very high CBD content, which unlike THC, is a non-psychoactive, 
making it an affective medical treatment for numerous conditions.

However, even though CBD does is non-psychoactive, being cannabis it 
still has small traces of THC and that ultimately could draw the 
attention of federal authorities. We hope not, because Wright has 
shown himself diligent in bringing legality to a once-illegal operation.

In addition to banking, there are other problems ahead. A proposed 
Yolo County ordinance could limit medical marijuana growers by 
specifying just how many plants would be permitted, how to deal with 
odors and possible theft, as well as keeping the fields away from 
school children.

We understand the need for limitations, but too many restrictions 
would kill this budding industry (if you'll pardon the pun). Imagine 
similar restrictions on, say, processing tomatoes (once thought to be 
deadly). The county would be in an uproar.

The fact is that the traditional agricultural landscape is changing. 
Specifically, criminalizing a plant specifically used for medicinal 
purposes is wrong-headed and seriously impedes the county and state's 
ability to collect tax revenue and provide work for growers and harvesters.

California needs to get out front of the banking issue before it's 
too late. And it already may be too late.

The industry in 25 states also has been examined by Dynamic 
Securities Analytics. "One thing is clear: A wide swath of financial 
institutions in both (legal and illegal marijuana) states are having 
to deal with the reality of the fast growing legal marijuana 
industry," DSA found. "While we do not yet have a complete picture, 
the available data suggests a slight opening of financial services 
to" marijuana-related businesses.

Any California banking legislation would have to be introduced in 
2016 at the earliest, and quickly could be overcome by events. We 
would prefer not to see banks set up exclusively for the use of 
marijuana growers, but if the state - and county - don't get with the 
times that could be exactly what happens. And no one wants to see 
legitimate pot harvesters conducting a cash-only business. That's 
only one step above those doing an illegal trade. And no one wants that either.
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MAP posted-by: Jay Bergstrom