WILLITS >> Commonomics USA President Marc Armstrong on Friday was in Willits to present his organization’s proposal for a public bank for the cannabis industry in Northern California.
Federal bank regulations and public safety issues associated with the cash-intensive cannabis business prompted Commonomics USA’s effort to establish legal precedent for a government-owned bank for “cannabis commerce” in Santa Rosa. The proposal for the “North Coast Public Bank project” has a long way to go before it becomes a reality, if the City of Santa Rosa is willing to make it one. Armstrong and others plan to have a roundtable with Santa Rosa civic leaders next month.
Armstrong called the lack of banking options for the cannabis industry a state’s rights issue and that said that those involved with legal cannabis have “every right to banking services.” He cited criminal behavior rampant in the industry as a reason to move quickly to establish a public bank to “give farmers a leg up” before California starts issuing commercial recreational licenses in January 2018 and the industry explodes.
Armstrong’s proposal has little precedent, making it a hard task to produce a draft ordinance for the City of Santa Rosa by June 30, which is the project’s end goal. The City of Oakland on Nov. 15 voted to investigate a public banking feasibility study to look into creating a public bank like the one Armstrong has proposed, but the City Council’s resolution only calls for a look at the cost to study the possibility of creating a bank, according to a report by the East Bay Times. The Bank of North Dakota, a state-owned bank established in 1918 to support small farmers, is an example of public banking success, but the stakes are different when it comes to cannabis, an industry that technically violates federal law. Armstrong called the public bank model a “local remedy” in lieu of waiting for the DEA to change its categorization of marijuana as a Schedule I drug. The label makes it illegal for private banks, which hold stock in the Federal Reserve, to take money generated from cannabis business activity, which is why he wants the public bank to operate as an arm of city government.
The bank would eliminate the need for local governments to partner with private companies like Sonoma County did earlier this month to increase funding for its Energy Independence Program, which loans money for green home improvements to property owners based on the property’s assessed value and lets them repay it over time on their property tax bills. The county’s Property Assessed Clean Energy, or PACE programs, invite for-profit companies to offer loans to property owners within county boundaries, according a report by to The Santa Rosa Press Democrat. While the county was praised for the initiative, Armstrong said private deals like that one are putting money in the wrong pockets.
“We are using the wrong models,” said Armstrong. “We are lending out what could’ve been capital.”
Armstrong has visited a few cities in the area to gauge interest in the project, which has an estimated total cost of $198,300, and to try to raise funds. Willits residents on Friday seemed hesitant to support the idea, if not a little confused.
Willits City Councilwoman Madge Strong attended the presentation. She said it’s premature for the city to be thinking about getting involved in something like this.
“Certainly, there needs to be thought given to how to handle legitimate money brought in by the pot business, and we just aren’t there yet,” said Strong.
The city is struggling to create its own commercial license ordinance for cannabis, a project it has been working on since September.
