So far, one of the biggest challenges surrounding legalized marijuana in Colorado has been what to do with all of the money being generated from this million dollar a day industry. Retail pot shops have been forced to operate as a cash only business because federal law prohibits banks from handling drug money — regardless if it comes from black market street thugs or upstanding members of the newfound legal marijuana commerce, although new federal guidelines may open the door to banking for cannabis businesses.
However, in Washington, Democratic State Senator Bob Hasegawa believes he may have the solution to remedy this crippling financial snag: state-run banking. The Senator recently introduced a piece of legislation – Senate Bill 5955 — aimed at pulling the recreational marijuana trade out from under Uncle Sam’s thumb by establishing a state-run bank fully supported by tax revenues.
The concept of state-owned financial institutions is almost unheard of in the United States. In fact, North Dakota is the only state in the nation operating a resource of this kind – earning millions of dollars each year from lending to businesses not associated with marijuana.
Senator Hasegawa says state-owned banks work similar to that of traditional banks: handling deposits and of course, writing loans. If his bill is passed, the institution would handle all of the revenue and taxes generated by the retail marijuana trade, which is set to get underway in the spring. “If every transaction goes through this bank, we can track every dollar that moves,” he said, adding that the state would then assume all of the risk for federal prosecution.
Hasegawa says his bill, which is scheduled to be heard during the 2014 legislative session, is a long shot, but regardless of the outcome, it will lay the groundwork for a more comprehensive state-run banking solution in the future.