After viewing the document, the Finance and Management Committee Unanimously voted to bring the issue to the full council for discussion. Despite the vast benefits a public bank presents to the people of Oakland, a few hurdles need to be addressed. Some of the significant challenges lie around Cannabis Legalization and high start-up costs.
Conflicting Regulatory Laws
The document presumed that the public bank would get over 600 million dollars in taxes from Cannabis sales. The document’s authors did not consider that Federal law and state laws all prohibit the sale of the drug. The conflicting regulatory rules would, by default, make the deposit of funds from the cannabis industry money laundering.
Proponents of the public bank of Oakland proposed implementing a two-bank system to solve the legalities around Cannabis sales and taxation. On the one hand, they suggest the creation of one bank system focused on depository services. In contrast, the other would focus on infrastructure banking as a state-chartered entity to serve the cannabis industry solely. Supporters have worked up a legislative framework that is 100% functional and effective.
Before May, the cannabis industry was a largely cash-dominated trade. The California State passed a bill permitting state banks to apply for and obtain cannabis banking licensing to solve this issue. The license would allow the banks to transact funds on Cannabis.
Significant start-up capital is needed
The third concern tabled by the council was around the financial muscle it takes to get a bank up and running. The large sum of money needed would no doubt drain the city’s budget. We all know that budget cuts can make life a lot harder for the city’s population.