Medical marijuana financial co-op bill to move ahead despite risk of federal action

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U.S. Attorney John Walsh's crackdown on pot shops near schools is a reminder that marijuana remains federally illegal regardless of laws in Colorado allowing its use for medical reasons. But Senator Pat Steadman, who previously criticized Walsh's action as an intrusion on state law, is committed to pushing legislation related to financial co-ops for MMJ businesses even though he acknowledges that such an institution could come under federal scrutiny, too.

As we've reported, banking issues were a topic of conversation (and complaints) among dispensary owners and the like even before legislators passed state weed regulations. But the subject stepped up front and center last August, when one of the few financial institutions to openly covet pot partnerships, Colorado Springs State Bank, announced that it was dropping MMJ accounts. Afterward, many centers turned to the Bank of Denver, only to have that institution inform customers in late October that it was also getting out of the medical marijuana business.

​Within days, Steadman, who'd earlier tried to include language about investment services in a regulatory cleanup bill to which U.S. Attorney Walsh objected, began talking about the creation of a state-mandated medical marijuana credit union. "I have been drafting some language to make some adjustments in the credit union statutes that would make it possible to have such a financial institution," he told us at the time, "and we've been meeting with folks and talking about how this might work, and what the obstacles might be."

Those challenges proved to be substantial, as Steadman conceded in a December conversation with William Breathes on the same topic. However, he saw promise in enabling legislation that would allow an outside party to create such an institution, as opposed to the State of Colorado doing so. As he told Breathes, "Someone would still have to come in and try to do it. And given the problems we've seen, I don't know that anyone would take us up on that offer. But I'm willing to bang my head on the wall to make the point."

True enough: Yesterday, he formally introduced Senate Biill 75, the financial co-op measure, which is being co-sponsored by Representative Tom Massey. But even as he urges fellow lawmakers to throw their support behind the proposal, he acknowledges that federal law-enforcement types may not embrace it -- even though he thinks they should.

"As far as how the U.S. Attorneys Office may view a financial institution for this industry, I'm not certain how it's going to play," he says. "I think everyone knows there's always a danger of federal intervention. But I don't think creating a financial institution creates a risk in any way.

"The argument in favor of the legislation is that it enhances the ability to regulate the industry and increase transparency by creating an audit trail for these businesses," he continues. "It's much easier to regulate a business that has a financial institution to handle its banking needs rather than one that's on a purely cash basis."

In other words, he feels federal officials ought to be rooting on Senate Bill 75, not looking at it as a potential target -- "but that's my point of view. I can't speak to how they would view it."

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More from our Marijuana archive: "Medical marijuana centers react differently to U.S. Attorney shut-down orders."

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