California Cannabis Banking: Financial Institutions Get Some Cover
In a step towards achieving the goals of the SAFE Banking Act, California Governor Gavin Newsom approved Assembly Bill 1525, which importantly provides that banks, credit unions, and other financial servicers to cannabis businesses do not violate California law “solely by virtue of the fact that the person receiving the benefit of any of those services engages in commercial cannabis activity as a licensee.” AB 1525 provides:
This bill would provide that an entity, as defined, that receives deposits, extends credit, conducts fund transfers, transports cash or financial instruments, or provides other financial services, including public accounting, as provided, does not commit a crime under any California law solely by virtue of the fact that the person receiving the benefit of any of those services engages in commercial cannabis activity as a licensee.
Governor Newsom stated:
I am signing Assembly Bill 1525, which affirmatively protects certain entities providing financial services to the legal cannabis industry and allows licensees to request that specific information about them be shared with financial institutions … This bill has the potential to increase the provision of financial services to the legal cannabis industry, and for that reason, I support it.