On January 14th, the California Bureau of Hashish Management (BCC) issued an announcement of proposed rules pursuant to AB 1525, which was authorised by the Governor in September 2020. The aim of AB 1525 was to:

present that an entity, as outlined, that receives deposits, extends credit score, conducts fund transfers, transports money or monetary devices, or offers different monetary companies, together with public accounting, as offered, doesn’t commit against the law underneath any California regulation solely by advantage of the truth that the individual receiving the good thing about any of these companies engages in business hashish exercise as a licensee.

The invoice would additionally:

authorize an individual licensed to interact in business hashish exercise to request, in writing, {that a} state or native licensing authority, state or native company, or joint powers authority share the individual’s software, license, and different regulatory and monetary info, as specified, with a monetary establishment of the individual’s designation and would require the request to incorporate a waiver authorizing the switch of that info and waiving any confidentiality or privilege that applies to that info [and would] authorize a state or native licensing authority, state or native company, or joint powers authority upon receipt of a written request and waiver as described above, to share regulatory and monetary info with the designated monetary establishment for the aim of facilitating the availability of monetary companies for the requesting licensee till such time that the state or native licensing authority, state or native company, or joint powers authority receives a withdrawal of the waiver.

The aim of AB 1525 and the proposed rules is to facilitate better entry to monetary companies for licensed business hashish companies. As we’ve written about extensively, hashish companies in California have usually struggled to safe monetary companies, together with financial institution accounts, which has led to a complete host of issues. You may learn extra about banking points confronted by the hashish business right here:

In line with the press launch issued by the BCC, the proposed rules will:

create a pathway for licensees to authorize sharing of personal info with chosen monetary establishments and supply a mechanism for monetary establishments to extra readily conduct the federally-required opinions of the hashish enterprise. By lowering the burden of offering monetary companies to hashish companies, extra monetary establishments could also be keen to offer companies, thereby lowering the necessity to maintain money on-hand and bettering public security.

Our agency has labored with various credit score unions to develop their due diligence protocols for working with hashish companies, and admittedly, the extent of due diligence required to make sure compliance is among the greatest deterrents for monetary establishments. Monitoring the regulatory compliance of a hashish enterprise consumer is usually a logistical nightmare, so we’re hopeful that these new rules will ease a few of that burden and permit simpler entry to fundamental banking companies for everybody within the business.

The general public remark interval is now open – feedback should be submitted to each the Workplace of Administrative Legislation and the BCC – and the proposed rules might be discovered here.