Client Overview and Challenge
The State Treasurer’s Office sought to evaluate the feasibility of establishing a state-backed financial
institution to serve the cannabis industry. Due to the industry&39;s regulatory complexities and financial
challenges, a thorough analysis was required to determine whether such an institution would be
practical and beneficial.
Actions Taken
Level 4 conducted an in-depth feasibility study, which included approximately 40 stakeholder
interviews, a review of over 300 documents, and extensive market research. Our analysis addressed
critical factors such as capitalization requirements, deposit insurance, regulatory risks, and access to
interbank funds transfer systems. We prepared both a comprehensive technical report and a high-
level summary for public dissemination, and participated in public hearings before a Senate sub-
committee.
Results and Impact
Based on our study, the legislature followed our recommendation and decided not to proceed with
the creation of the state-backed financial institution. Our analysis provided clear insights into the
risks and challenges of such an institution, ultimately guiding the decision-making process.