In a landmark decision for the marijuana industry, the Colorado legislature approved the first state-run financial cooperative for marijuana businesses.
“This is the final piece to our pot puzzle,” said the bill’s chief sponsor, Rep. Jonathon Singer.
The marijuana industry has, until now, been able to operate as a cash-only business that lacks access to traditional banking services. The Obama Administration announced a set of guidelines in February for banks wishing to deal with cannabis companies, but these failed to go so far as to provide blanket immunity for the financial institutions choosing to deal in an industry currently scheduled as illegal under federal status.
The bill was cleared Wednesday by both chambers of the General Assembly and is now headed to the office of Governor John Hickelooper for a final signature. Sponsors of the bill championed the imminent threats that business owners are facing due to the large amounts of cash on hand. This has included burglary and high profile threats. Republicans pushed back in hopes of delaying the bill to allow further time to examine the “complex” plan.
It was also noted that the state lacks preparer revenue tracking systems due to the current limits on capital and credit services for these businesses. Essentially, this new co-op will operate in the same manner as a credit union, without a deposit insurance requirement. The co-op will be back by the state and governed by the state financial services commissioner.
In order for these businesses to have access to credit card processing and checking services, the Federal Reserve must also back this co-op, an option that remains unlikely without a deposit requirement.
Also on Wednesday, Colorado passed a bill mandating prominent display of edibles containing THC and is currently considering a bill that would allocate cannabis revenues to the marijuana enforcement division and to drug prevention and education programs.
Should other states with legal medical or recreational cannabis follow Colorado’s lead and start a state run banking co-op? Tell us in the comments below!