Banking buddy system needed for cannabis industry
Member Fiona Ma | CPA Board of Equalization | 8/24/2017, midnight
Another benefit is transparency. Since the State Bank is a public bank, it would be under scrutiny by lawmakers, regulators, and the public with the governor being ultimately accountable. Perhaps it could use the existing IBank structure since the governor and the treasurer, among others, have a seat at the table in its formulation. The state could model the State of Washington by requiring background checks from people applying for licenses to assess, if they are a credit risk, creating a buddy system to work with the state bank and/or private institutions, providing due diligence on the companies. There are many potential options, and I look forward to the report from the treasurer’s Cannabis Banking Working group on recommendations on how California could implement solutions.
While there are still details that need to be worked out to make this closed-system bank work due to federal guidelines, there are other, smaller options we could introduce to help the cannabis industry pay their taxes and flourish more expediently. One helpful tool to consider is the use of kiosks in places like state offices around California. While the large payments wouldn’t be feasible here, smaller taxes and fees could be paid by industry operators so they wouldn’t have to travel long distances to make these payments safely, and state agencies would be able to process them quickly and accurately.
In addition, we need to consolidate the myriad of taxes and fees paid by the industry to different agencies. Services should be expanded at the California Department of Tax and Fee Administration (CDTFA) to allow them to efficiently collect and process tax and fee payments from a variety of sources and integrate them with a track and trace program.
While there are certain challenges we must face to make these ideas a reality, it is our duty to ensure we strategically propose the best approach and implement it successfully. I’ve been honored to work with Treasurer Chiang’s Cannabis Banking Working Group, and trust that after our last meeting we will have all the tools we need to do what is best for California, the cannabis industry, and our taxpayers. Imagining success and planning for the future is key to continuing California’s economic growth. After all, the journey of a thousand miles begins with that first step.
As one of the few Certified Public Accountants (CPAs) to ever serve on the California State Board of Equalization (BOE), Board Member Fiona Ma, CPA is a strong voice for businesses and taxpayers. Fiona served as the Chair of the BOE in 2016 and is the current Chair of the BOE’s Legislative Committee.