State Cannabis Authorities Receive Approval for Regulations to Facilitate Financial Services for Cannabis Businesses
Press release from CalCannabis:
The Office of Administrative Law (OAL) approved the proposed emergency regulations, 2021-0122-01E, to implement processes for cannabis businesses to authorize release of information to financial institutions.
The regulations were filed with the Secretary of State on February 1, 2021, and are now in effect.
The state cannabis licensing authorities have developed two forms to implement these regulations. The same forms are being used by all three state cannabis licensing authorities, streamlining the process for licensees and financial institutions:
- Licensee Authorization for Release of Information Form – This form may be used by licensees to authorize a financial institution to receive information or to withdraw a previously provided authorization.
- Financial Institution Request Form – This form may be used by a financial institution to request licensee information after the licensee has provided authorization.
Completed forms should be sent via email to [email protected] or by mail at the following address:
California Department of Food and Agriculture
CalCannabis Cultivation Licensing
1220 N Street
Sacramento, CA 95814The adopted regulations are intended to facilitate greater access to financial services for licensed cannabis businesses that face challenges obtaining banking, insurance, and other financial services commonly available to other businesses. By reducing the burden of providing financial services to cannabis businesses, more financial institutions may be willing to provide services, thereby reducing the need to keep cash on hand and improving public safety.
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What does this really mean for farmers? This was straight from the CDFA. Can anyone decipher the govt. speak?
The part about releasing your info and then not having an account isn’t true but o.k.
Unless your saying after you already lied and told them your farm only produces tomatoes maybe
Functionally, it currently means very little – especially to the smaller farm.
In short:
To protect themselves against Federal indictment (racketeering, etc.), banks must put in the documented effort to show that any cannabis client is operating 100% state legal. This law will make it easier for the banks to document this by making the State data (Metrc, etc.) available to the banks for review.
The entire process that banks need go through, and the bank risk still not well mitigated means that most banks still won’t touch our industry just on principle. In the rare case a bank will touch us, the fees they pass on to us for the extra documentation amount to thousands (or tens of thousands) of dollars per month just to have the account. This pretty much eliminates the little guy.
One way to look at this is that it’s a small, incremental step towards normalizing banking for the industry.
Another way (and the current reality) is that this will again benefit the larger players far more than the smaller. The little guy can’t afford to pay for the bank to put in the required work, and the bank isn’t even going to offer them the service as the return is too small to offset the risk.
Most likely. Also sign a paper saying you are aware it’s federally illegal. Humboldt pulled something like that with an ordinance about taxes saying they would collect when…..”federally legal”. They’ll take your money and throw you under the bus.
JB- Thank you for that! I read your comments seriously because you are an honest relayer of the facts. We are on different perspectives and I often speak against people like you who embraced the “legalization” scam and moved into bigger permitted scenes. I might have even called you a “traitor” at one worked-up point lol! So we disagree on some stuff ha ha. Anyways….your comments have always brought honest information to this website and you have made truthful and nuanced comments about the complicated regulations. Still…I don’t want your Salinas mega-grows displacing my neighborhood mom n pops!! On the other hand I appreciate your comments even when I dislike them ha ha….I agree with this comment above. It s one more way in which the little guy gets disadvantaged. Soon enough we will have mega-rich international commercial interests taking over…this is where “legalization” is leading us inevitably and predictably. For me it’s like watching a slow-motion train crash when my family and friends are on the train…it will not end well.
// “….We are on different perspectives”//
No worries. The world is full of different perspectives and we all just have to make our own way.
// “Still…I don’t want your Salinas mega-grows displacing my neighborhood mom n pops!!”//
As a very small grower, I worry about many of the same things you do. I’m pushing forwards every day knowing I may just get steamrolled.
Though we may often disagree on the fundamental causes, your concern for your community is real and valid.
// “it will not end well.”//
When it comes to the triangle, I agree. The people who built the business and the reputation are getting the short end of the stick.