California Treasurer Details Pot Plan

SACRAMENTO -- Cannabis is already a lucrative business in California.

Come Jan. 1, it'll take off even more.

"In California annual sales are expected to surpass $7 billion, generating $1 billion per year of tax revenues," State Treasurer John Chiang said.

The only problem is most banks that are federally insured will not allow marijuana growers and dispensaries to open accounts because marijuana is still an illegal substance under federal law.

That means most marijuana businesses use cash.

"Any time you have a lot of cash in one place, it really becomes a magnet for violent crime," California Growers Association Executive Director Hezekia Allen said.

This under-the-table payment method also means, the state can't keep track of tax revenue. That's why last year Chiang put together a team to study banking opportunities for the cannabis industry.

On Tuesday, they announced four key findings.

First, the state recommends armed couriers pick up cash from licensed businesses. Officials also recommend expanding cannabis industry's access to banking services under the current law.

"We recommend creating a one-stop portal for all regulatory agencies to deposit and share their data with financial institutions," Chiang said.

Chiang's team will also explore the idea of a state-run public banking system -- an alternative that would be more likely to open accounts for non-traditional businesses in the state, like pot.

Colorado tried something similar but it didn't work out. Chiang says California will learn from their mistakes and study if one would be beneficial. Right now, North Dakota is the only state that has its own bank -- insured by the state and not the FDIC.

"My office is working to develop a multi-state consortium involving dozens of states and local governments to pull resources and work to help federal law catch up to faster evolving values and viewpoints of the state," Chiang said.