The plan was born out of a need for state-licensed marijuana businesses who don’t want to be limited to a cash-only basis, but that can’t go through the usual banking process for their financial needs. Because marijuana is still outlawed on a federal basis, banks have shied away from doing business with pot shops in Colorado, despite guidance recently released by the feds for banks.
The proposal would’ve allowed those dispensaries and stores to create their own sort of uninsured credit union, and was introduced late on Wednesday in the state legislature. It still would’ve required the he U.S. Federal Reserve to grant permission for the co-ops to offer services like checking accounts and credit to customers.
It cleared a House committee yesterday before another committee gutted it with an amendment saying the state will just have to keep working on the issue, reports the Associated Press.
Many sponsors noted that it was kind of a long-shot attempt to avoid the hammer of federal law but allow businesses to move away from the cash-only system.
“I don’t know whether this will take an act of Congress or an act of God at this point,” joked Rep. Jonathan Singer, a sponsor of the bill.
“It seems like we’re throwing spaghetti noodles against the wall to see if they stick,” said Rep. Chris Holbert, in what might be my favorite lawmaker comment of the week.
Banking groups had testified that the co-op attempt would just not ever work out, including the head of the Colorado Bankers Association who expressed his doubts on the plan.
“It is flatly illegal to deal in any illegal substance or any proceeds therefrom,” said Don Childers.
Colorado lawmakers shy away from pot bank [Associated Press]