For years, financial hassles have forced a multimillion-dollar industry to rely almost entirely on cash and to keep any bank accounts under hush-hush names because fed-fearing financial institutions are wary of doing business with state-legal pot shops. But dispensaries in Colorado are finally seeing a ray of hope, now that a marijuana banking co-op that received its charter from the state is moving forward with plans to open in the new year.
There are still hurdles ahead for the Fourth Corner Credit Union, namely getting approval and insurance from the National Credit Union Administration. But at the state level, the credit union is set to open and even has the backing of Governor John Hickenlooper, who calls it the "end of the line" for the banking issues that have kept dispensaries in the dark ages.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
Banking issues have been a constant thorn in the side of an industry that wants to be considered legitimate. Because marijuana remains illegal federally and banks have to be insured by the federal government, many businesses have been hesitant to get involved with state-legal dispensaries, which the feds still consider as being involved in criminal activity. The lack of banking services means that dispensaries sit on large amounts of cash and can't offer customers things like credit-card servicea; it also makes bookkeeping a nightmare. On top of that, cash-heavy dispensaries make very attractive targets for criminals.
There have been several attempts to right this through the years, with proposals going back as far as 2011 at the state level. The most recent attempt was at the end of the legislative session in May, when lawmakers passed a complicated bill that, in the words of Representative Jonathan Singer, the sponsor, "creates a financial-services cooperative for the marijuana industry that's otherwise up until this point been unbanked. It gives businesses the opportunity to form a cooperative that works like a credit union, but with even more scrutiny -- and no federal insurance."
The new credit union isn't related to the cooperative bill, however; that measure would require the approval of the feds. Instead, the Fourth Corner plan followed the standard state credit-union licensing process.
The credit union could open as early as January 1, even without approval from the NCUA. State law allows new credit unions to open with pending licenses, and Fourth Corner officials say they hope to get it up and running to prove to the NCUA that the credit union can function without any problems. Credit union boardmembers include Heather Jackson, from the Realm of Caring Foundation (the group behind Charlotte's Web); Paige Figi, mother of the now-famous poster child for juvenile medical cannabis, Charlotte Figi (namesake for Charlotte's Web); and Kristi Kelly, founder and CEO of Good Meds. Other boardmembers include a real-estate broker, a disabled veteran and a PR agent. Have a tip? Send it to email@example.com.