For months, Senator Pat Steadman has been talking about the need for a credit union for the medical marijuana industry. But yesterday, a proposed bill that could have paved the way for such an institution died in committee, leaving Steadman to wonder if the state can provide a solution to the MMJ industry's banking problems.
Over the last year, banks have been dropping medical marijuana businesses due to a rift between state laws allowing medical marijuana and federal laws that do not. Since the feds regulate banking, institutions that used to handle dozens of MMJ accounts, including the Colorado Springs State Bank and the Bank of Denver, have terminated almost all accounts in order to avoid federal scrutiny.
That leaves hundreds of dispensary owners without a place to make cash deposits, forcing them to store large amounts of money in their safes along with the medicine they sell. Some dispensaries have found creative ways to work around the issue, including paying employees in cash or buying pre-paid credit cards for online bills. But most realize that isn't practical. With credit card providers also dropping dispensaries, patients are increasingly forced to pay in paper.
Steadman's bill would have enabled legislation allowing various groups to come together and form a medical marijuana credit union. But the bill was shot down by a 5-2 margin after several hours of deliberation by the Senate's finance committee.
We spoke with Steadman yesterday morning before the hearing. He said that even if the bill were to pass, he wasn't sure it would have been a fix for the banking problem facing medical marijuana businesses.
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"The solution doesn't lie at the State Capitol in Denver," he maintained. "This is a problem with federal law and federal law enforcement agencies. We have been searching and searching for some kind of work-around. The bill we came up with has the potential, but for various reasons, I'm not sure it's all there."
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Michael Elliot, executive director for the Medical Marijuana Industry Group, which represents a number of dispensaries around the state, believes the failure to pass the bill puts medical marijuana dispensary employees in danger and creates problems with transparency. "A lack of banking services leads to a decrease in public safety, particularly for patients, employees, and business owners; and less accountability to local, state, and federal tax collectors," he said in a statement. "It's unfortunate that this bill failed, leaving these public safety concerns unaddressed."
In our conversation yesterday, Steadman said the solution ultimately lies at the federal level, adding that he spoke with Representative Jared Polis about the issue as recently as last week. "He is aware of the problem and trying to help," Steadman said. "He's in a much better position to work towards a solution than I am."
We've put in another call to Steadman. If and when he gets back to us, we'll update this post.