One of the most difficult parts of operating a cannabis business in California is managing your cash flow. Luckily, this week, the state Senate is taking a step forward to ease that burden. SB930 creates a state charter for banks to serve cannabis businesses. This allows licensed and approved cannabis manufacturers, cultivators, and retailers to write checks to pay fees, taxes, and vendors, ultimately making it easier to do business.
California SB930 proposes putting the Department of Business Oversight in charge of banks and credit unions specifically established to process deposits, withdrawals, and transactions by the state’s budding cannabis industry. If approved, SB930 will allow cannabis companies to use this system of state-licensed banks to pay rent, vendor invoices, and also buy state and local bonds. It also means that the estimated $600 million in cannabis taxes the state intends to collect this year can be paid securely through banks, rather than in cash and in person.
This is great news for cannabis entrepreneurs, as it lowers risk in your accounting procedures and can increase security at your premises. Less cash on-site is a big win for anyone looking to operate safely while keeping security budgets low. A bank dedicated to cannabis businesses will also have implications for what you look for in a real estate property and how you pitch to investors.
The bill has to clear California’s State House of Representatives before going to the governor’s office, but this is overall very good news for the cannabis industry. If you have questions about this bill, or about accounting in general, please get in touch with our experts.