Fiona Ma Is Banking on Cannabis
As she eyes a run for California State Treasurer, BOE Chair Fiona Ma is bullish on cannabis and remains unwavering in her determination to fix the woeful state of nonexistent banking for the industry.
If California Board of Equalization Chair Fiona Ma were a cannabis strain, she likely would be a sativa-dominant hybrid whose prevailing qualities enhance creativity, curiosity, and fearlessness and are grounded in a self-assured determination to lead a purpose-driven life. Those are a few of the character traits Ma exhibits with ease and without artifice as an individual and an influential politician. A rare feat, indeed, but not unexpected, considering the cushion of support she received growing up in the Great Neck region of Long Island, New York.
“I was very lucky to have a strong father who was always positive and supportive of whatever I wanted to do,” said Ma, very early on the morning after the 2016 elections. “I grew up with an open mind to try a lot of things. I was always encouraged to go try. I have done many things in my life—some of it good, some of it not so good—but whatever I did, [my parents] were like, ‘You’re great.’”
A CPA by profession, Ma has served as a California elected official at the local, state, and now administrative levels of government since 2002. She is a self-described “Type-A personality with a touch of ADD” who, at 50, is coming into her own as a leader in a Democrat-heavy state that boasts the fifth largest economy in the world. As she embarks on a run for State Treasurer in 2018, her success is even more impressive, considering her tendency to address issues other politicians would rather avoid. Perhaps no issue better illustrates Ma’s eagerness to lead from the front than her enthusiastic embrace of cannabis legalization in California and her very public resolve to fix one of the industry’s most challenging problems: lack of access to banking because of federal prohibition.
A recent San Francisco Chronicle article on the state’s impending “pot tax” boon noted in detail her chops on the subject. “Ma knows what she’s talking about,” wrote cannabis editor David Downs. “For four years, she served as a supervisor in San Francisco, one of the few cities to regulate and tax medical pot dispensaries. She won a seat on the State Board of Equalization and is its first certified public accountant. An Asian-American woman trained under Democratic political maven John Burton, she sees normalizing relations with the cannabis industry as a matter of standing up for what’s right. Her mission is to make sure that includes pot taxes.”
A certain restlessness runs in the extended Ma family. “My parents are naturalized U.S. citizens who left China before the communists came to power, went to Hong Kong, and met in Toronto,” explained Ma. “My mother’s father was a Presbyterian minister, and he moved around a lot from church to church. When he moved from Toronto to New York, she went as well, of course. My dad also moved to New York, which is where they got married. Then he got an engineering scholarship to the University of Glasgow, so my parents moved to Scotland, which is where I was conceived. My mother loved the name Fiona, and that’s how I got the name.” She was raised not in Scotland, but in the suburban community of Great Neck on Long Island, New York. Even after her parents moved to California, she stayed in Great Neck until deciding to move one more time to be closer to her parents in San Francisco.
She also inherited the restlessness, exemplified in her irrepressible urge to escape the office and experience the reality of her constituents’ lives. That edifying wanderlust is partially what led her to conduct a series of tours of agricultural farms in her district during her years in the Assembly. The other reason was political strategy born of her early days on the San Francisco Board of Supervisors in 2002.
“It was my first elected office, and I wasn’t ready,” she recalled. “I wasn’t ready to be attacked or challenged, and I certainly wasn’t ready to be in the newspaper defending myself. After four years of being on the board, I learned how to defend myself, which meant doing the homework and knowing the issues almost better than the media.”
Ma carries that lesson with her to this day. “I’m not shy. I like people, I like to try new things, and I like to go and do. That’s my basic nature. These are the same traits I bring to the job of politics. I don’t really learn by reading a book. I like to touch and see and feel. That’s how I learn and absorb information.”
Case in point: those agricultural tours. “When you have credibility in doing something, you are stronger,” Ma explained. “For instance, I knew nothing about agriculture, so I decided I might as well sit on as many committees as I could. That’s where the meat is, where you hear testimony, and where you can do research. I sat on seventeen committees, including the Agriculture Committee, and after four years I had done about 100 tours of farms. Now I know more about agriculture than some of these farmers, who only know about one product.”
Despite all the tours as a member of the state assembly, and in spite of a four-year tour on the San Francisco Board of Supervisors, Ma did not have a clue the state was experiencing serious issues with its flourishing-but-unregulated medical marijuana industry that would only get worse if left unresolved.
“No one ever talked about cannabis when I was in the legislature,” she said. “I didn’t hear from my constituents in San Francisco that there was a problem with price, access, or quality. Nobody ever talked about it for six years. Of course, nobody in Sacramento wanted to talk about it because it was a taboo topic, but I didn’t know that at the time. Ignorance is bliss sometimes, right?”
But neither did the traditional-crop farmers she met say a word about the effects the state’s large number of cannabis farms had on their harvests. “I’m doing agricultural tours throughout the state, and cannabis is grown throughout the state, and no one ever mentioned anything,” she said. “The farmers never said to me, ‘It’s not fair that we have strict regulations and water rationing, and yet the cannabis growers are sucking up all the water and using pesticides and not following agency guidelines.’ Nobody ever said anything.”
Amazingly, it was not until Ma arrived at the Board of Equalization in January 2015 that George Runner, whose second-district seat she had taken over, introduced her to issues with the cannabis industry. “George asked me if I wanted to work on this project with him,” she said. “[He told me,] ‘We represent fifty out of the fifty-eight counties, and we’re supposed to collect tax on the dispensaries, but we don’t know how much we collect.’ ‘Are you kidding me?’ I asked him. ‘We’re a tax-collecting organization and we don’t know how much we’re collecting? This is crazy. Yes, let’s do it.’”
Thus, Ma’s formal education in the fastest growing industry in the country began. “I represented twenty-three counties up to the Oregon border,” she recalled. “I went and visited with all twenty-three [tax] assessors in the first year.” She also met with her cannabis-cultivating constituents. “People were very warm and open and told us what is actually going on up there, how long they’ve been doing it, how they do it, and why they don’t pay their taxes. They explained how they transport the cannabis, who buys it, and what the difficulties are.
“We quickly found out several things,” she continued. “Some people did not take out their seller’s permit because of self-incrimination, and some didn’t know they’re supposed to [apply]. But how do you [get a permit] if there’s no code for cannabis? So, they ended up checking off agriculture, food, or healthcare [on the application form]. I found out they couldn’t get bank accounts, and they were also being penalized 10 percent for bringing cash to the BOE. And some of the BOE offices don’t even take cash, so they would ask me how they are supposed to pay their taxes at all.”
Ma was dumbstruck. “I was, like, this is crazy,” she said. “Cash is still U.S. currency. We should be taking it, especially if you’re not able to open a bank account.
“This whole new world opened up, and I ‘got it’ because I’d been doing agriculture for a long time,” she added. “These are very sophisticated farmers who’ve been growing for generations sometimes. They’ve lived and learned and are operating this whole underground economy under the legal economy. It’s like two worlds: There’s the upper world, where everyone is legal and banking in the open, and then there’s this underground world where everyone’s transacting and growing and trading.”
Informed by colleagues that the Emerald Triangle area was one of the poorest areas in the state, she found a different picture altogether. “I went up there and it didn’t make any sense,” she said. “There are no homeless people, and everyone seemed to have a house. I figured it out. Everyone is operating a cash business, and no one is reporting.”
The solution was all too obvious. “We need to solve this banking thing,” she said.
Her concerns extend beyond unreported taxes. “I’m interested in social causes, and domestic violence is one of my big issues,” she said. “When you’re operating a cash business, people do not report domestic violence, or any type of violence, because they don’t want people coming to their house. Then, with respect to child support and deadbeat dads, why aren’t they paying up there? Well, if they don’t have real jobs, they’re not filing income tax returns. All these issues started resonating.
“When people become legal, there’s a way to track them and ways to audit them to see how much they really have,” she continued. “People will also feel safe that if they call 911, a cop is not going to come and raid the house because they’ve got guns and growing material, and they’re growing all over the place. It became obvious that we must bring this into the open.”
Cannabis would appear to be the perfect mission for Ma, who explained, “I’m all about leveling the playing field. What is attractive to me is that a lot of people are not helping these folks and are not trying to solve the banking problem. It’s the huge elephant in the room, and it is hurting the cannabis industry, hurting government, and hurting people.
“I am obsessed with it,” she added, “and I am talking to everyone all the time, looking at every option, pushing everyone all the time, asking ‘Can we do this? Is there an easier way?’ Obviously, we want to do it the easiest way, because it has less resistance. The hardest way would be to create a state bank, if the federal government is not going to budge.”
She ticked off the reasons why California must take the lead. “We’re the sixth largest economy. We have a separate charter. We’re different from the rest of the states. We could create a state bank to handle this entire industry, if there is the will and a way.”
Big challenges remain. “Unfortunately, in California, Governor Brown is not pro-industry, probably because Lieutenant Governor Newsom is so pro-industry and they don’t really get along,” said Ma. “[State Attorney General] Kamala Harris was running for the senate and wanted to stay low-profile on the issue. State Treasurer John Chiang understands the issue, but he doesn’t really want to get out there because he’s running for governor [in 2018]. So why aren’t we all talking about it and holding a stakeholder meeting to address the problem? It just doesn’t seem to be very high on people’s agendas.”
For many months, Ma has been speaking at every cannabis industry panel she or her staff could attend, and she insists the industry’s issues will remain a priority in her run for State Treasurer in 2018. “The primary is in a year and a half, and I’m already talking about why I want to run,” she said. “Obviously, I have the background and qualifications, and I think I have a good picture of California. I’m also ready for the job. I think the treasurer should be visible promoting the state, being an advocate, explaining why we welcome business and why things are doing well.
“Then there is the technical stuff,” she continued. “The treasurer watches the money, makes sure we have enough to issue bonds, and makes sure our credit rating remains strong. Then there are the things that I want to do. My priority right now is the cannabis issue and the fact that there are billions of dollars circulating within the United States because the industry cannot put it into a bank legally. I talk about cannabis as my number-one priority because it’s the largest underground economy, and it’s important not only to solve our economic issues but also the related social issues.”
She also has been meeting with everyone and anyone who has a possible solution to the problem. “I’m looking at all of it,” said Ma. “Everybody comes to us, and we are agnostic about what sort of system it will be. On the government side, we just want to get paid in electronic transfer or check. We do not want people coming in with cash.
“In a perfect world,” she added, “we would create a state bank that is almost like a closed-loop system. It’s insured by the state, we have our own insurance, and people can deposit funds into accounts. But it’s going to be very difficult and, realistically, I am looking at other ways that will be easier to do. But I keep talking about a state bank because it freaks everybody out.
“If you talk about the sixth largest economy starting its own state bank,” she explained, “it freaks the banks out because they don’t want people outside of their network. They want people to go to their bank and credit unions. For the federal government, banking is their purview. They let the states do certain things under state’s rights, but banking is a national issue. So, whenever a state starts creeping into what [the feds] do, it starts freaking everyone out, and I like that. The more opposition to ideas, the more I push back. I find that the more you push something, the more likely there will be compromise in the end. When both sides are unhappy, that’s when there is compromise.”
Brave new world
A natural optimist, Ma remains confident California will be able to address any issues facing the state, even with a potentially hostile administration in Washington, D.C. “The result of the presidential election was very upsetting,” she said, “but it also reinforced the fact that we live in a special state. We can’t imagine that the rest of the country elected someone like Donald Trump, who says the things he does. That’s scary for us. But as Californians, I think we feel a heightened sense of standing up for ourselves and protecting our values, our citizens, our businesses, and our economy.
“I’m not exactly sure what is going on in these states to make the people feel so disgruntled,” she added, “but here in California we need to protect what we have while we continue to move forward. And we’re lucky, because up and down the state, Democrats are in leadership. We may argue about the minor issues that separate us, but not the major issues. It’s an opportunity to take California to a new level, especially with the cannabis industry, and I look forward to working with people in California and other states to figure out how to lobby the federal government and fix this banking issue, the crux of everything.”
If focus and determination are necessary ingredients for success, Ma is primed to succeed, but she needs all the help she can get. “I want to pass first-in-the-nation bills, which requires having the right people in place and knowing who to call,” she said. “You need to have allies when you’re running bills. How many people can you call to testify or sign on to a letter? That, I’ve learned, is the strength of a good politician or elected [official]. Who are you representing and how many people can you bring with you to that table?”
To that end, Ma is asking the industry to help her by making sure the lines of communication are open. “I need every industry group to sign up with me, so that when we are ready to lobby for banking we have a big, cohesive voice. It would be very helpful if I can get everyone to call in or email a legislator to support a specific effort.”
“To become a part of our banking solution team, call Tim Moreland in my Sacramento office to coordinate,” she added. “It’s going to be a federal issue, and we’re also going to need organized activism in all the states. Do we have a uniform voice so that we can move bills when they come up? That’s what I don’t know yet, and it’s what I am going to start working on in my next phase pushing the federal government. But if we get too much pushback, we may need to go back to state options. Anything we need to do to allow commerce.”