Nevada will pilot a closed-loop payment processing system that would provide a banking solution to the state's marijuana-related businesses, after Democratic Gov. Steve Sisolak signed Assembly Bill 466 into law last month.
The three-year pilot program, which the state hopes to have up and running by 2020, would allow marijuana-related businesses and consumers to deal in tokens through an app. Dispensaries and the industry's ancillary businesses operate largely in cash because federal law prohibits banks from servicing the industry.
- Nevada State Treasurer Zach Conine told the AP the closed-loop system will be similar to using gift cards or digital wallets such as Venmo.
As marijuana legalization becomes widespread in the U.S., more attention is drawn to the challenges the industry faces.
"We think [the closed-loop system is] an innovative solution to a real problem," said Conine, adding the system would eliminate the large amounts of cash that the state's pot businesses must deal with by creating an online system where digital currency transactions could be made.
According to PYMNTS, 47 states have legalized the drug in some form. Those states represent 319 million people, or 98% of the U.S. population.
As Congress works to come up with a solution to the cannabis banking problem on a federal level — the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing on the issue on Tuesday — more states are taking matters into their own hands.
Meanwhile, a California Senate bill aims to let banks and credit unions apply for charters that would allow them to service marijuana-related businesses.
State Senate Bill 51 calls the lack of banking services for marijuana businesses a regulatory and public safety issue — and a challenge for state and local governments that must audit cannabis-related businesses.
"This is made significantly more difficult when the majority of transactions are completed with cash," the bill states.
Additional language in the bill predicts the marijuana industry is expected to generate more than $8 billion in revenue annually.
SB 51 moved on to the Assembly Appropriations Committee after passing the state Senate in May.