SACRAMENTO -- Nearly a decade after Californians voted to legalize recreational cannabis, state leaders and industry representatives say legal businesses are still facing major challenges. Lawmakers, cannabis business owners, banking representatives and advocates gathered at the State Capitol on Tuesday for a hearing hosted by State Treasurer Fiona Ma to discuss ways to strengthen California's legal cannabis industry. Ma said she has worked closely with the cannabis industry since voters approved Proposition 64 and has served as a liaison between lawmakers and industry leaders. She said one of the biggest issues facing legal cannabis businesses continues to be limited access to banking. Although recreational cannabis is legal in California, it remains illegal under federal law. That conflict has made many banks and credit unions hesitant to work with cannabis businesses. Those that do often charge higher fees. Without affordable banking options, many cannabis businesses are forced to handle large amounts of cash, creating security concerns for owners and employees. Ma said the goal of Tuesday's hearing was to bring together industry leaders, financial institutions and lawmakers to identify solutions that could help the industry move forward. "Hopefully, we'll come up with some good recommendations, things that we can work on moving forward with the right people in the room and just get the facts and the figures and then seeing how we can bring back this industry," Ma said. Lauren Carpenter, CEO of Embarc, one of California's largest cannabis retailers, said high state and local taxes are also putting additional pressure on legal businesses. "We're looking at an approximate 40 percent tax rate," Carpenter said. She said those costs make it harder for licensed cannabis businesses to compete with illegal sellers, who are not subject to the same taxes and regulations. "It allows for the continued proliferation of an illicit market," Carpenter said. Carpenter said hearings like Tuesday's are an important first step in helping lawmakers better understand the challenges facing California's legal cannabis industry and what changes may be needed. "That's the really important first step to us all getting on the same page," Carpenter said.
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