Colorado pot co-ops – cannabis credit co-ops if you will – may be the legislative solution to a pot problem in the booming legalized weed sales in Colorado. Licensed pot retailers have been forced to operate a cash-only business after federally insured banks refused to take deposits from pot dispensaries or transact their money. Colorado legislators are now mulling over so-called pot co-ops to bridge this marijuana money quandary.
According to The Denver Post on May 1, Rep. Jonathan Singer, D-Boulder, submitted House Bill 1398, called the “Marijuana Financial Services Cooperatives Act.” The law would allow for the creation of a co-op – or the business equivalent of a Credit Union – which would service marijuana shops. While the Federal Reserve Bank decides whether to allow the Colorado pot industry access to critical banking services, the state House committee on Business, Labor, Economic & Workforce Development approved the bill, 9-2, last week. The bill now moves on to the House Finance Committee.
“This sets up a structure of a new type of financial structure to the gap we're seeing between banking and the marijuana industry,” Singer said during open session testimony on Thursday. “It's the only solution we see. This is a message to the federal government to say we are ready to go. Start with a template, then ask for federal approval, sending a very clear message.”
Bill 1398, read here in its entirety, states in part: “Because marijuana is illegal under federal law, financial institutions are reluctant to serve state-licensed marijuana businesses. These businesses therefore currently operate almost entirely on a cash-only basis, which raises their costs, increases the risk of crime, and impedes the state's ability to account for these businesses' revenues.”
State legislators were hopeful that the establishment of co-ops would open the eyes of the federal government and coerce them into wading into the banking law conflict. As it stands now, state law in Colorado says pot is legal, but on a federal level, recreational use remains illegal. However, it seems like the bill may be dead in the water before it even started to swim.
The Associated Press, via ABC News, is reporting that lawmakers changed course less than one day after the bill cleared the House committee. Says the AP: “Another House committee gutted the plan by amending the bill to say that Colorado will continue studying the problem of marijuana businesses having a hard time accessing banking services.”
In typical lawmaker double-backs, they essentially requested more time to “study” the bill. “Let's take some time to have this properly vetted,” said Rep. Kevin Priola, R-Henderson, who led the charge to ramp down Bill 1398. In response, Singer, the Bill’s sponsor said: “I don't know whether this will take an act of Congress or an act of God at this point.”