Colorado Paves Way For New Pot Banking System
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On Wednesday, Colorado lawmakers approved the first financial system for marijuana businesses that is designed to allow the industry to take advantage of basic banking services. The call for such a system has grown since the retail sale of marijuana became legal on January 1, since pot retailers have only been able to operate as cash-only businesses.
"We are trying to improvise and come up with something in Colorado to give marijuana business some opportunity, so they do not have to store large amounts of cash,” said state Sen. David Balmer (R-Centennial).
The bill will form a network of cooperatives that will allow pot businesses to pool their money in order to receive banking services. Under the new financial system, banks will no longer have to fear federal prosecution for doing business with the marijuana industry and pot businesses no longer have to fear being robbed for holding large sums of cash.
Despite the step forward, the new system is contingent upon the U.S. Federal Reserve allowing the co-ops to accept checks and credit cards for transactions.
"This is not something that we can wait for any further," said sponsor Rep. Jonathan Singer (D-Longmont).
In January, Attorney General Eric Holder opened the way for new regulations that would allow banks to do business with the pot industry, echoing the concerns of retailers and Colorado lawmakers. "You don't want just huge amounts of cash in these places," Holder said. "They want to be able to use the banking system. And so we will be issuing some regulations I think very soon to deal with that issue."
But the banks blanched at Holder’s proposed guidelines, leaving Colorado retailers holding onto their bags of cash. "It is very easy to see somebody get killed over this issue," said Marijuana Industry Group Director Michael Elliott to lawmakers last month.
Meanwhile, Gov. John Hickenlooper is expected to sign the legislation pending a review of the bill’s language.