SAN DIEGO (KUSI) — Recreational marijuana will be legal for sale next year, ushering in a whole new set of rules and regulations.
One of the biggest challenges will be setting up banking services for the cannabis industry.
The cannabis industry is going to be a cash cow for the state of California. By some conservative estimates, it could generate $7 billion in the first year.
But where and how will all that money be banked?
On Friday, the state treasurer asked regulators, bankers and cannabis business owners to think about some solutions.
These are tales from the trenches. Gregg Marte is a cannabis distributor who's been held a gunpoint. He was one of those who spoke at the public hearing, organized by State Treasurer John Chiang.
With the state just months away from the sale of marijuana for recreational use, the treasurer said the cannabis industry can't continue to operate as a cash-only business.
Under federal law, marijuana is still a controlled substance and that means banks are not supposed to accept money for marijuana-related business.
But Chiang, and everyone else at the meeting, believes the rules need to change.
Tom Digiovanni is a cannabis grower in desert hot springs who's been able to deposit his money with a financial institution in Los Angeles. It's one of only a few.
In 2014, the U.S. Justice Department issued something called the Cole Memo, producing a basic framework for banks that have assumed the risk of opening their doors to cannabis businesses.
The memo provided some protection from prosecution, but most say a memo is not enough.
Sundie Seefried is the CEO of a credit union in Colorado, a state that legalized recreational marijuana in 2012. Although she could be charged with money laundering under federal law, she's providing banking services for dozens of marijuana-related businesses.
With enormous profits on the horizon, industry advocates say a banking system with strict regulations will help keep gangs and criminal elements out.
Business owners say they are ready to take their profits to the bank.
This is just one in a series of state-wide hearings about setting up a banking system for those cannabis dollars.
Based on these hearings, the treasurer will produce an analysis with options and recommendations. That analysis will be ready in the fall.