THE ONE WITH THE CASH CROP
The state of Colorado has 5.4 million people, total. Last year they did $1.3B in marijuana sales and produced over $200M in tax revenue for their state. Coastal SoCal’s 16 million residents means that the newly legal cash crop in 2018 may well produce around $4B in sales, just locally. That's year one sales - cash sales. Great ‘problem’ if it was just hundreds of millions in much needed California tax revenue for our schools. However, thanks to current DOJ ‘policy’, no banks can/are willing to accept the money. Therefore, the industry is drowning in cash. Cash that attracts criminals and criminal activity of all sorts. From tax evasion (because it's too easy when there's no accountability in a cash market) to MS-13 and Cartels with armed robbery/invasions, we cannot wait to see what trouble creeps out of the shadows. In a state of 38 million residents, we MUST act now to create a solution and normalize this massive industry and its State and Federal Tax Revenue. The money needs to be bankable; we think this is a statewide $7-10 billion problem next year.
We’re calling on CA Attorney General Xavier Becerra, Gov. Jerry Brown, Lt. Gov. Gavin Newsom and other CA State Leaders to do what they’ve been doing: Lead. California must create a Public Bank. An intrastate Farmers Merchant Bank/Credit Union to house the industry's cash and get it off the streets. This would allow us to assimilate and tax this gigantic revenue stream. We cannot ask existing private sector banks to take on this burden.
If elected, we would introduce legislation in the House to allow states that have legalized marijuana to create an intrastate infrastructure complete with Federal wiring capability. We must lead by a California example. Colorado has had this issue twice in similar cases already in the 10th circuit. We are over 7 times the size of CO. This problem is already here and gets much bigger in 2018. This is a State Rights Fight, and We Have Things To Do.
*A Public Bank would be able to lend to the middle market as well - something big banks stopped doing years ago.
The TL;DR Version:
As we’re all well aware, last year the voters of California resoundingly approved the State legalization of marijuana. The issue at odds now is not with the drug itself, but more immediately the welcomed money that it generates. Make no mistake; this is a cash crop - an unsubsidized, sin taxed, cash crop with big revenue dollars.
The previous Administration abided the Cole memo as the lay of the land, and we all basically agreed to disagree; CA commerce evolved, relatively unimpeded. We cannot rest assured things will go so smoothly next year.
Our solution is simple but time sensitive. We need to create a State Bank/Credit Union to house and transact the cash for the industry. It would keep the money above board, easier to assimilate and more accurate to tax. Amazingly, less cream is skimmed off the top when your options are military escorts, man-sized safes in your walk-in-closet and constant fear for your family's safety - or just putting it all in a bank and paying your taxes/bills/employees - like a normal businessperson.
California is about 38 million people. Statewide, we think this becomes a potential $10 billion problem in 2018, and that's our conservative estimate. Others think it will 'only' be a $7 billion dollar industry, but still lament that so much needs to be done between now and then. The money must be brought off the streets before anything else matters.
All of this new revenue is a MASSIVE WIN for California which badly needs it to plug holes in our state budget. But we must lead, and lead now. I am challenging Attorney General Xavier Becerra, Governor Brown and Lt. Governor Gavin Newsom to join me in calling for the State to create this bank #CAcashcrop. When the injunction and lawsuit from Attorney General Jeff Sessions follow, California will welcome this State Rights Fight. We have already democratically voted to legalize a state industry, and we must now manage it for our safety. If the DOJ would like to dispute that, we are sure our California State Attorney General would welcome the fight; we know he’s OG like that!
This is yet another reason we love capitalism: legalization has already lead to increased availability for CA citizens. This has taken customers out of the back alleys and into taxed businesses stream. We are thereby taking marketshare from the cartel who are losing money. Real money… like a third to half of their money JUST from the legalized sales cutting into their U.S. marketshare of pot already.
The Voters of California have already spoken and been heard. The cash crop is coming - we have a Constitutional Right to manage a state sanctioned industry when the Federal Government is stuck in archaic policy.
Its time to lead, California - We Have Things To Do.