Colorado legislators are mulling so-called pot co-ops to solve the local marijuana industry's banking problem, as the legal retailers have been operating in cash after being refused financial services from federally insured banks.
According to The Denver Post
, Rep. Jonathan Singer, D-Boulder, submitted House Bill 1398, the "Marijuana Financial Services Cooperatives Act," which would create local financial-services co-ops modeled after credit unions.
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"These businesses . . . 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," the bill states.
Credit unions are co-ops as well, however they are limited to individual memberships. The "cannabis credit co-ops" would extend membership to all legally-licensed pot companies across the state, creating a sort of uninsured credit union.
"This sets up a structure of a new type of financial structure to the gap we're seeing between banking and the marijuana industry. It's the only solution we see," Singer said during testimony. "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."
If the bill is passed into law, the cannabis co-ops would in turn need approval from the Federal Reserve to access the nation's payments system and do away with all the cash. Legislators thought the co-ops would force the federal government to finally express some opinion one way or another on the current conflict of state law (where pot is legal) and federal law (where it remains illegal).
The bill passed the House committee on Business, Labor, Economic & Workforce Development Thursday afternoon, but was later stalled in the House Finance Committee, where it was met with skepticism from both parties.
"Anything we do at the state level is not going to get around the issue of money laundering without the cooperation of the federal government and the Federal Reserve," said Rep. Chris Holbert, R-Parker.
The bill has likely been shelved indefinitely, but state legislators are likely to propose other solutions in the coming months.
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