Cannabis Tax Recipients Could Impact Santa Barbara’s City Banking
Feds Continue Campaign Against Pot Sales
Most cannabis operators do not have a bank account because federal regulations do not allow banks to accept their proceeds. In fact, Union Bank reportedly shut down the accounts of several clients they suspected were involved in the cannabis industry. So how will that impact the City of Santa Barbara, which banks with Union, when it starts accepting tax dollars from cannabis businesses next year?
For decades, the city had banked with Santa Barbara Bank & Trust. But several years ago Union acquired the local bank and soon after “significantly” increased fees associated with the city’s account, according to Finance Director Bob Samario. He said the city was already planning to terminate Union’s contract two years ago; it had nothing to do with the cannabis issue.
In the coming weeks, the city will put out a request for proposal for a new bank to handle funds and investments. Among the “thousands of things” the city will ask about will be the banks’ policies on dealing with cannabis tax receipts. The city will also inquire about the banks’ investments. Union Bank came under fire with city councilmembers for investing in the Dakota Access Pipeline and other industries they did not deem socially conscious.
