Buckner suggests state banks for pot businesses

State Rep. Kambium Buckner (D-26th) speaks to a South Shore town hall meeting on Oct. 24. (Photo by Aaron Gettinger)

Staff writer

While it may not pass the General Assembly’s now-underway shorter veto session, Rep. Kambium Buckner (D-26th) is interested in creating state charter banks for Illinois’ legal marijuana businesses, as those entitles are unable to open accounts with Federal Deposit Insurance Corp.-insured banks.

While marijuana will become legal in Illinois on New Year’s Day, the drug is still illegal under federal law. Funds traced to the marijuana industry could be considered money laundering under federal law, forcing the industry to rely on using cash in transactions, payroll and taxes.

In response, Buckner is considering “trying to work a state charter bank bill” similar to one the California Senate passed this spring to allow private banks or credit unions to apply for a limited-purpose charter so as to provide marijuana businesses with bank accounts.

As it stands, Buckner said marijuana businesspeople are putting funds into real estate — especially in his district, which spans from Gold Coast through Kenwood west of Woodlawn Avenue and Hyde Park west of Ellis Avenue down through South Chicago.

“We could have a situation where people are making cash hand-over-foot; they have nowhere to put it, so then they look at places like Woodlawn and South Shore,” Buckner said. “They buy a bunch of real estate; it puts the market in flux. Or they buy a bunch of properties and then sit on them, and these blocks that really need attention and investment are not able to be invested in.”

“Assuming we have another recession coming, assuming that the housing market is going to do something we aren’t ready for — I think it could throw another monkey wrench into the entire ecosystem,” Buckner continued.

He said he has been working with staff to draft the bill. He said he may introduce it this veto session to accrue allies with the expectation that any action on it will wait until the longer session next spring.

Democratic leaders — including Buckner’s predecessor, now-Deputy Gov. Christian Mitchell, who spearheaded the end of cannabis prohibition in Illinois — have said that any veto session action on marijuana will likely be limited to technical fixes, including a provision that gives municipalities control over which facilities would allow consumption of the drug — an issue of interest to renters whose landlords ban consumption in their units.

Buckner also commented on the state-legalized casino coming to Chicago and other Democratic legislative priorities.

Mayor Lori Lightfoot met with the Chicago’s state legislators earlier this month to propose a graduated transfer tax on commercial real estate sales and several issues pertaining to the city’s planned casino, which the General Assembly authorized earlier this year.

“People think it makes sense when it comes to trying to find new ways to shore up the coffers of the city that won’t affect normal folks at an exorbitant rate,” Buckner said, adding that advocates have suggested the revenue could be used to address homelessness and housing security issues in Chicago. “I don’t see that being a huge fight, but there may be issues with where the money actually goes to, once it comes into the coffers.”

Buckner also commented on the placement of the casino, which would go in his district should it be built at the Michael Reese Hospital site, 2929 S. Ellis Ave. While Ald. Sophia King (4th) has come out strongly against its establishment there, Buckner said Ald. Greg Mitchell (7th) supports for putting it at the U.S. Steel South Works site on the lakefront in South Chicago, which is split between his ward and the 10th, whose alderman, Susan Sadowski Garza, supports putting it at the Harborside Golf Course at the Bishop Ford Freeway and 111th Street.

“I don’t think it should go to a neighborhood that doesn’t want it,” Buckner said. “I live just a few blocks from Michael Reese, and I understand the angst, based on historical context, and why folks don’t necessarily want a casino there.”

The Herald could not reach Mitchell for comment, but Buckner said he has been “loud and vociferous about the fact that he wants this in his community” and said the community wants it as well. Buckner said he understands the hesitation about putting it at the South Works site near the Horseshoe Hammond casino in Indiana.

Lightfoot has urged that the casino be co-owned by the city and state, with operations contracted out to a private contractor. Buckner said he supported that proposal so long as it maximizes revenue, though he declined commenting on the splitting of that revenue she proposed earlier this month (51% to the state and 49% to the city) or her proposed reduction in the effective tax rate from 72% to 45%. He had been out of town during the meeting but said he is due to have a one-on-one with Lightfoot’s staff on Oct. 27.

Gov. J.B. Pritzker is prioritizing a bill to lower insulin costs in Illinois by capping patients’ out-of-pocket costs at $100 for a 30-day supply. The legislation’s Democratic sponsors have derided drug makers’ “corporate greed” and “price-gouging” as costs have risen 600% since 2001. The Illinois Department of Public Health reports that 12.5% of the state’s population has diabetes.

Buckner backs the bill. “I have had some instances of diabetes in my immediate family; I understand what folks who need insulin go through,” he said. “This is not just policy that I think is noble: I think it’s necessary.”

He recalled the 400% rise in the cost of epinephrine-injecting EpiPens in 2016, saying, “There’s price-gouging going on, and it’s the least among us who suffer the most.”