On May 7, the Colorado legislature passed a new proposal to allow for the implementation of a banking system which caters directly for the burgeoning pot and marijuana industry. Additionally, members of state government project this idea will create wide ranging functions which will allow pot businesses to deposit, transact, capitalize, and fulfill all types of financial services previously denied these businesses by the major banks.
The need for this new internal system comes from the growing rejection of pot and marijuana related business by major financial entities such as The American Bankers Association, which publicly stated that they are uneasy with facilitating financial transactions for a business that currently violates Federal drug laws.
Many of the fears major banks are experiencing comes from a blockbuster settlement made by HSBC in July of last year when it was determined that they had been laundering money for international drug cartels for several years.
These fears however, are no longer valid for states such as Colorado and Washington, which passed legislation legalizing many forms of pot possession, consumption, and sales, and is in full support of enlarging the marijuana industry since early projections are showing a vast increase of tax revenues to these states.
The bill approved Wednesday would allow marijuana businesses to pool money in cooperative s, but the co-ops would on take effect if the U.S. Federal Reserve agrees to allow them to do things like accept credit cards or checks.
Democratic Gov. John Hickenlooper supports the pot bank plan and is expected to sign it into law, though a spokesman said Wednesday the governor had yet to review the final language.
Lawmakers from both parties supported the banking co-ops as a way to properly audit marijuana shops and to make sure they're paying all their taxes. Dispensary owners came to the Capitol this session to tell of their difficulties paying taxes and utilities in cash and the dangers of dealing in cash. - Associated Press
Prior to the Income Tax Amendment that was voted into law in 1913, over 50% of the nations revenues came from taxes on alcohol, tobacco, and other 'sin' and 'vice' products. And since this Amendment's adoption, the outright prohibition of many former legal vices such as marijuana, and at one time alcohol, were done because of a moral agenda, rather than a financial one.
It will be interesting to see how big a state run bank, which is initially being dedicated to the pot industry, can grow into in the coming years. For decades, the state of North Dakota has run its own bank, and their results have been a budget with zero debt, and with much of their excesses and oil revenues being put back into the welfare and benefit of the people of that state. And if this model can be similarly transferred over to Colorado or Washington to help facilitate marijuana banking, then it opens up a vast new industry where states can seize control of their finances from the 'too big to fail' banks, and protect themselves and their citizens from any future round of financial insolvency.