California Looking Into Possibility of Creating State Bank for Marijuana Industry

A customer buys cannabis products at MedMen, one of the two Los Angeles-area pot shops that began selling marijuana for recreational use under the new California marijuana law Jan. 2, 2018, in West Hollywood. (Credit: David McNew/Getty Images)

State Treasurer and Democratic candidate for governor John Chiang on Tuesday announced his office will study whether California should create a state bank to serve California’s newly legalized marijuana industry.

The effort will be coordinated with the state attorney general’s office, with both agencies trying to determine the costs, legal implications and other possible barriers to creating a state-run bank.

The biggest risk may come from Washington. U.S. Atty. Gen. Jeff Sessions has indicated that the federal government will begin enforcing federal laws banning marijuana in states where cannabis is legal.

But it didn’t take long for one of Chiang’s Democratic rivals in the governor’s race, Lt. Gov. Gavin Newsom, to take a swipe at him. Within minutes of Chiang’s announcement, Newsom’s campaign manager criticized Chiang for not endorsing Proposition 64, which voters approved in 2016 to legalize recreational marijuana.

“John Chiang went out of his way to avoid endorsing Prop. 64 and virtually every other criminal justice reform ballot initiative since he’s been a statewide office holder,” Newsom campaign manager Addisu Demissie said in a statement.

The Chiang campaign dismissed the attack, saying the treasurer supported the private use of marijuana, but expressed reservations about whether the ballot measure would ensure cannabis was properly regulated and safeguards were in place.

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