With recreational marijuana sales set to become legal in California next year and most banks unwilling to open accounts for cannabis companies, pot entrepreneurs are desperate to figure out what to do with their piles of cash. Now, some want the state or cities to get involved.
Over the last year, there has been increasing interest among cannabis businesses and public officials in the idea of public banks: government-owned institutions that would take deposits, make loans and, in California at least, be willing to work with marijuana companies.
Gubernatorial candidate and California Lt. Gov. Gavin Newsom has called for the creation of a public bank and has discussed the idea with members of the cannabis industry. This week, L.A. City Council President Herb Wesson said he wants to look into creating a city-owned bank that might serve cannabis businesses.
But would it work?
Maybe, said Matt Stannard, who has been an advocate of public banking long before California residents voted to legalize recreational pot use last year.
He’s optimistic, but also warns that there are plenty of potential pitfalls.
“I’m not going to say that if you create a public bank, it’s going to solve all of the marijuana industry’s banking problems,” he said. “But it’s worth a try.”