San Francisco is moving forward on the path toward opening a municipal bank – a decision which could give a huge assist to the growing cannabis industry.
Like most cities, San Francisco does its banking with large commercial banks. But a November policy analysis report prepared for the city’s Board of Supervisors says San Francisco’s goals – including small business lending and support for affordable housing – could be better served by doing its banking elsewhere. The report also says a municipal bank could also potentially be used to provide much-needed financial services for cannabis businesses.
Even in states where medicinal or recreational cannabis has been legalized, most cannabis businesses can’t access traditional banking services. Banks shy away from the industry, given the federal government still considers cannabis to be an illegal drug.
“For safety and security reasons, we do try to limit cash that’s on hand,” said Asia Greer.
Greer is a “budtender” at 515 Broadway, a medical cannabis dispensary located in Sacramento. She says the inability to use traditional financial services at banks limits cannabis businesses in their ability to get loans and expand.
Sacramento Cannabis Czar Joe Devlin said the city gave a “cursory look” at the idea of creating municipal bank, but he was told there was not a legal path forward to serving cannabis businesses. Fred Brousseau, the director of policy analysis who prepared the San Francisco report, said that San Francisco’s municipal bank, if created, could work with cannabis businesses all over the state – not just in San Francisco.
Brousseau says San Francisco’s Board of Supervisors will likely hold a hearing to discuss the potential municipal bank early in the new year. California begins legal sales of recreational cannabis on Jan. 1.