Members of the medical marijuana biz have been complaining for years about the difficulties inherent in obtaining banking services in an industry that the federal government considers illegal -- and Senator Pat Steadman has sought a fix for nearly as long. Now, on day one of Colorado's legislative session, he's ready to move forward with a proposal for a financial cooperative designed specifically for MMJ enterprises.
Banking issues have been a topic of conversation (and complaints) among dispensary owners, investors and so on even before legislators passed state weed regulations. But they truly came to the fore 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 John Walsh objected, began talking about the creation of a state-mandated medical marijuana credit union. As he told us at the time, "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, 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."
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That remains the case, according to a reliable industry source. Democrat Steadman and co-sponsoring Republican Representative Tom Massey plan to put forward legislation that would allow the state to sanction outside parties interested in launching a medical marijuana industry-specific "financial cooperative" -- the name being used rather than either "credit union" or "bank." Moreover, we're told that there's at least one individual or group poised to take advantage of this opportunity if legislation is passed, with more likely to follow.
As we understand it, final language of the bill, which is expected to be introduced next week, is still in flux. But even without everything pinned down, a number of other potential co-sponsors have expressed interest due in part to arguments encapsulated in a statement provided to us by the Medical Marijuana Industry Group's frontman, Michael Elliott. He writes:
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MMIG's number one objective this session is to help medical marijuana businesses get access to banking services in the form of a financial co-op. A lack of banking leads to (1) a decrease in public safety, particularly for patients, employees and business owners; and (2) less accountability to local, state, and federal tax collectors. Though this problem ultimately needs to be addressed at the federal level, the state cannot wait for that to happen. Now that the public and the General Assembly have put the medical marijuana program in place, the creation of financial co-ops is critical to protect public safety and ensure accountability. We appreciate that Senator Steadman has been working closely with the banking institutions and credit unions to propose a solution that will work for all interested parties.
We've got a call in to Steadman. When and if he gets back to us, we'll update this post.
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More from our Marijuana archives: "4/20 at CU Boulder: Student legislative council votes unanimously to move event off-campus" and "Medical marijuana: 14 percent of MMJ patient applications being held up by CDPHE."