California State Treasurer John Chiang’s Cannabis Banking Working Group starts to address Federal-California “disconnect” on cannabis banking services

California State Treasurer and declared 2018 gubernatorial candidate John Chiang presided today over the first meeting of the Cannabis Banking Working Group (CBWG) he recently called into existence.  The mission of the CBWG is to resolve the “disconnect” between Federal classification of cannabis as a Class 1 (dangerous and useless) controlled substance and California’s treatment of it as a legitimate and legal medical and recreational option.

Medical cannabis was legalized in California in 1996, by a favorable vote of the people on Proposition 215.  Recreational cannabis was legalized in the Golden State in 2016, by the favorable vote of the people on Proposition 64.

Here’s the press release his office issued this afternoon:

 

Cannabis Banking Tales of Risks Take Center Stage

at Capitol Meeting of Industries and Public Agencies

Treasurer Chiang’s Cannabis Banking Working Group hears of real and potential risks to cannabis workers, their families and banks

PR16:61
12/19/16

SACRAMENTO – Simple questions about how to maintain bank accounts and make deposits became entangled with prison anxieties and fears of robbery Monday during the first in a series of meetings of the Cannabis Banking Working Group convened by California State Treasurer John Chiang. About 100 people attended the meeting in the State Capitol.

The working group was organized by the Treasurer following voter approval of Proposition 64 last month. The proposition legalizes the recreational use of cannabis but leaves unresolved a conflict with existing federal law. Caught in the middle are California banks and cannabis businesses that are legal under California law.

“As we learned today from listening for more than three hours to experts with California’s public agencies, financial services and cannabis industry there is a dangerous, disruptive disconnect between state law and federal law,” the Treasurer said.

The disconnect not only adversely affects governments seeking to collect taxes, cannabis businesses seeking to use traditional financial services and the banks that might wish to provide those services, panelists said Monday. The disconnect also puts cannabis workers and business owners at risk of being harmed and bankers at risk of going to prison, they told Chiang and members of the working group.

“The cannabis industry is the largest shadow economy in California. Allowing them banking access would facilitate compliance and bring millions of dollars into our economy,” said Fiona Ma, California State Board of Equalization Chairwoman and a member of the Cannabis Banking Working Group.

“We need strong leaders like Treasurer John Chiang to tackle this urgent and complex state and federal conflict.”

In addition to Chiang and Ma, the 16-member working group includes representatives of the California Bankers Association, California Community Banking Network, California and Nevada Credit Union League, the California Employment Development Department, the state Franchise Tax Board, Department of Business Oversight, Bureau of Medical Cannabis Regulation, Business Consumer Services and Housing Agency, Attorney General, California Growers Association, California Cannabis Industry Association, California State Association of Counties, League of California Cities and the law firm of Clark Neubert, which represents the cannabis industry.

The Cannabis Banking Working Group plans to hold at least four more meetings around the state.

“It is clear the machinery of federal government is clunking along behind the trending preferences of the American people,” Chiang said. “The people increasingly proclaim cannabis use acceptable. Yet federal law maintains its use is a crime.

“Defining the problem is our first objective. And we started doing that today. As we continue to hold meetings around the state and compile information, I think we will continue to gain ever more clarity on precisely what should be done and how.”


To watch a video recording of the first meeting of the CBWG, click here.

California State Attorney General’s Office warns Uber of legal action if it doesn’t comply with state self-driving car permitting regulations

On Friday, December 16, 2016, Miguel A. Neri and Fiel D. Tigno, both Supervising Deputy Attorneys General in the office of California State Attorney General Kamala D. Harris, sent a letter to Anthony Levandowski, head of Uber’s self-driving car operations, demanding that Uber “immediately remove its ‘self-driving’ vehicles from the state’s roadways until Uber complies with all applicable statutes and regulations.”  Here’s the text of that letter, in its entirety:

RE:  Department of Motor Vehicles Communication to Uber

Dear Mr. Levandowski:

            I am following up on the December 14, 2016, letter sent to you by Mr. Brian Soublet of the California Department of Motor Vehicles.  The Department of Motor Vehicles has asked the Attorney General to take action.

            Accordingly, we, as attorneys for the Department of Motor Vehicles, by this letter, are asking Uber to adhere to California law and immediately remove its “self-driving” vehicles from the state’s roadways until Uber complies with all applicable statutes and regulations.  If Uber cannot advise the undersigned that it will immediately remove its self-driving vehicles from California public roadways until it obtains the appropriate permit, as 20 other companies have done, the Attorney General will seek injunctive and other appropriate relief.

            I look forward to hearing from you.

Etopia News also looks forward to hearing from Uber on this subject, since the ride-hailing company has hitherto refused to comment on this issue to it or any other news outlet, relying instead on previous remarks by Mr. Levandowski in the company blog as its contribution to the discussion.

In those remarks, Mr. Levandowski states:  “we understand that there is a debate over whether or not we need a testing permit to launch self-driving Ubers in San Francisco. We have looked at this issue carefully and we don’t believe we do.”

DMV chief counsel warns Uber about operating self-driving cars without the appropriate permit

Brian Soublet, Deputy Director and Chief Counsel of the California Department of Motor Vehicles yesterday sent a letter to Anthony Levandowski, a pioneer in driverless technology and co-founder of vehicle automation company Otto, now owned by Uber, at the Uber Advanced Technology Center on Harrison Street in San Francisco, in which he said that Uber needs to get the proper permit before it can, as it has announced it is doing, offer rides in the Volvo XC90s that have been converted to self-driving vehicles, albeit with human drivers stationed behind the wheel to take over if necessary.

Here is what the letter said:

Dear Mr. Levandowski,

Uber announced today [December 14. 2016] that vehicles with “state-of-the-art self-driving technology” will be available for customers in San Francisco.  The announcement further describes the service as allowing Uber to “continue to improve our technology through real-world operations.”  Clearly, Uber is intending to test its autonomous vehicle technology on California’s public roadways.

As you know, the California Department of Motor Vehicles (DMV) is responsible for ensuring the safe operation of autonomous vehicles on California’s public roads.  To achieve this goal, two years ago the DMV developed regulations for manufacturer’s testing of autonomous vehicles.  The regulations were developed to foster technical innovation and ensure the safety of the motoring public.  Twenty companies are approved to test a total of 130 test vehicles that are being driven by more than 480 permitted test drivers in California.  They are obeying the law and are responsibly testing and advancing their technology.

California Vehicle Code Section 38750 and California Code of Regulations Article 3.7 clearly establish that an autonomous vehicle may be tested on public roads only if the vehicle manufacturer, including anyone that installs autonomous technology on a vehicle, has obtained a permit to test such vehicles from the DMV.  The permitting requirement serves the important public policy objectives of ensuring that those testing the vehicles have provided an adequate level of financial responsibility; have adequately trained qualified test drivers on the safe operation of the autonomous technology; and will notify the DMV when the vehicles have been involved in a collision and specify the instances when the technology had to be disengaged for safety reasons.  These requirements serve to build public trust in the safety of the technology and to foster confidence in allowing autonomous vehicles on public streets.

Had Uber obtained an autonomous vehicle testing permit prior to today, the company’s launch would have been permissible.  However, it is illegal for the company to operate its self-driving vehicles on public roads until it receives an autonomous vehicle testing permit.  Any action by Uber to continue the operation of vehicles equipped with autonomous technology on public streets in California must cease until Uber complies.

It is essential that Uber takes appropriate measures to ensure safety of the public.  If Uber does not confirm immediately that it will stop its launch and seek a testing permit, DMV will initiate legal action, including, but not limited to, seeking injunctive relief.  In the meantime, the DMV is available to meet to discuss our concerns.

The DMV fully supports the advancement of autonomous technologies.  This technology holds the promise of true safety benefits on our roadways, but must be tested responsibly.  If you have any questions, please feel free to contact me at (916) XXX-XXXX.

Sincerely,

BRIAN G. SOUBLET

Deputy Director/Chief Counsel

Uber has not yet responded to an inquiry from Etopia News for its side of the story.

You can read what the New York Times has to say about this issue here.

As Mike Isaac, the reporter who wrote the story in the Times, says “The dispute was a reminder that Uber has not expanded its service without regulatory hassles.”

It remains to be seen how well Uber’s own corporate navigation system (lacking GPS) can guide it along the path to the implementation and acceptance of “driverless ride sharing.”