Medical marijuana credit union: Senator Pat Steadman on needs & challenges of proposal

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Pat Steadman.
The Bank of Denver's decision to close its medical marijuana accounts, following a similar move by Colorado Springs State Bank, has put plenty of MMJ businesses in a tight spot. Senator Pat Steadman is considering legislation to authorize a credit union devoted to the industry. But he's not yet ready to guarantee such a bill will be introduced in the upcoming session, owing to the myriad challenges such a proposal presents.

Steadman confirms that "we're looking at the possibility of creating a 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, and we've been meeting with folks and talking about how this might work, and what the obstacles might be."

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The largest of these remain "legal requirements for the FDIC" -- the Federal Deposit Insurance Corporation -- "versus the FCUA" -- the Federal Credit Union Act. "That's banks versus credit unions." Both are federally regulated, and because marijuana remains against federal law, such institutions fear retribution for working with MMJ businesses -- which is why the Bank of Denver and Colorado Springs State Bank have elected to sever ties with such customers. However, Steadman notes, "there are some alternatives in the law for credit unions, and we're looking at some changes to those alternatives to make it work.

"There are some other things about the credit union model that lend itself better to the creation of a financial institution to serve this industry," he continues. "I think their nonprofit status is of interest, and also the fact that their membership would be to a defined class. But what's still not clear is how the federal government is going to view such an institution. And one of my questions is, if we were to create a financial institution to serve this industry, does that in any way increase the likelihood that the federal government would feel the need to start cracking down more in Colorado. Because that's certainly not anything we'd like to see happen."

One reason for concern: U.S. Attorney John Walsh specifically cited objections to an investment fund passage in House Bill 1043, the so-called medical marijuana cleanup bill that Steadman co-sponsored, even though this section had already been removed. Because this concept had come to the fore before the measure reached the Senate, Steadman admits that "I didn't spend a lot of time studying it -- and I hope some of the concerns with it would not be present if a credit union could be established. But those are questions and conversations that we're still having."

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On the positive side, Steadman says representatives of the Medical Marijuana Enforcement Division with whom he's spoken advocate launching a financial institution, "because it would facilitate the regulation and accountability we have for this industry for auditing purposes. And I'm hopeful this step would be viewed as one that further facilitates our fairly rigorous scheme.

"I think it's in everyone's interest to have these businesses use a financial institution instead of it being a strictly cash business, with lots of cash changing hands that's harder to audit and trace. The business owners want that, the regulators want that, and you would think even the naysayers would want that."

Still, when asked if he's fully committed to sponsoring such a bill, Steadman defers. "Let's just say I'm very interested in the topic. It's pretty complicated, but we're certainly exploring the possibilities."

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More from our Marijuana archive: "Medical marijuana ban opponent in Fort Collins says fight is still uphill despite fundraising lead."

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23 comments
Publius Ceasar
Publius Ceasar

You know, despite all this brouhaha over banks and fed law, I don't see any real problems with the 5 dispensarys I consult with. They all use online banking or foreign banks authorized to operate in the US. I can't say I'm sure if they are FDIC insured, but they have no problem making deposits, withdrawals, credit cards and all the rest of the services a business needs from a bank. Funny...

Patient
Patient

Steadman is a good guy that supports marijuana in colorado. What's with all the hating? His ideas aren't perfect but at least he's trying. Stoners seem to have a way of turning political allies into enemies. Someone is trying to do a good thing and he's being attacked. Seems I remember this happening with sonnenburg too. The constant negativity is a big downer. We need all the support we can get.

Donkey Hotay
Donkey Hotay

"...and what the obstacles might be."

Federal Money Laundering criminal codes ... which provide for prison sentences of 20 years -- for each and every count.

Knowingly accepting illegal (federally) drug $$ is in fact and in law a violation of Federal Money Laundering laws.

Period.

Colorado Mmj Patient
Colorado Mmj Patient

Watch all MMCs put their money into one bank only to have the FEDs come in and seize the whole thing.  

The State will have to create something and keep it from the Feds.  Its deposits can't be insured by the Feds.  They would just need a clearing house to handle the checks and probably a brick and mortar building with safe.  

Walter
Walter

Pat Steadman is a SELLOUT to patients!

Joey Ramone
Joey Ramone

Matt Cook (former MMED head and now private mmj consultant) mentioned this back in 2010. He said they wanted to set up a "banking" system that would "be more like a depository than a bank. The dispensaries will be able to deposit money, but not take any out." He thought this would be a good thing, as it would get rid of all the dispensary's extra cash. Be wary of this scheme -- the state of Colorado wants its hands on your money to make it easier to seize when the FEDS come in!!!

ColoradoMidnightRider
ColoradoMidnightRider

Yeppers, Pat Old Boy, that's JUST what the state of Colorado NEEDS to be involved in, NOT! Patients financials have already meant major SLUSH FUNDS for the MMED, DOR, and has brought SO MUCH BackDoor Political monies to the new 'Industry' Cronies like yourself. Why NOT give you ALL a bigger Cash Credit union Sandbox to play in?Indigent LGBLTQ patients have benefitted directly from your politics how? Your constituants claim Free MMJ licenses and half off discounts at high-priced wellness centers is NO KIND OF HELP from the new multi-Billion dollar industry!

Why NOT devote political energy towards forcing these pot industry Maggots to show an element of financial compassion? OR, would that negatively affect where your bread is buttered?

High Country Caregiver
High Country Caregiver

There's a big difference between a bank and a credit union.  A bank treats you like a customer where at a credit union you have to be a member.  I don't see how this is going to work though, if it didn't work at the banks, how does a credit union stand a better chance at taking dope dollars?  Credit Unions have to meet even stricter FEDERAL guidelines too and the members of the Credit Union benefit from the Union financially which is going to make the burden even harder for getting this thing off the ground.  It's a possibility and a bright idea, but as with anything medical marijuana these days, is just a lost cause.  Until we bury this medical jargon and move to real legalization there will always be the puppets and the clowns and all their silly ideas getting nowhere and getting in the way of your weed!

Donkey Hotay
Donkey Hotay

The entire For-profit Retail Dispensary Industry and their partners in crime, the MMED Dept. of Revenue, are in fact and in practice ADVERSE to the best interests of Patients and their Individual Private Caregivers !

High Country Caregiver
High Country Caregiver

.... and of course make it compulsory for the dispensaries to only use the deposit scheme or else be none compliant.....

Corey Donahue's Mom
Corey Donahue's Mom

Says the man known for scamming patients all over the state...Go back to your Caregivers Cup and continue to rape the patients of their medicine, Tipton.

Jay
Jay

Aren't you Tim Tipton? And you're calling someone else a 'pot industry maggot'?

That's pretty hilarious timmy.

Monkey
Monkey

Yep, Feds have a hard time tracking cash. Sounds like more politicians cashing in on weed world, pretending to be compassionate and wasting my money. But how great would it be for everyone, the fake bank can cash in for a while before the Feds come in and seize everyones account while the politicians can keep telling us we need them to protect us. I remember when people preferred cash and privacy and good buds kept you a little paranoid, I guess warehouse weed is making people complacent with a false sense of security. Cannabis has become a political leg to stand on so conflict will be a necessity, If everything is good we don't need politicians to fix anything so it's there job to convince us of their importance. Give your money to me, I'll protect you, I promise.

Juneslunk
Juneslunk

anything MMJ these days is a lost cause? really?

rsteeb
rsteeb

Back at ya.  Have you priced Marinol, genius?

Matt in Boulder
Matt in Boulder

If you step back and look at the impact of dispensaries themselves I think you'd have to agree that they have made an overall positive contribution.  It is the politicians that have fucked everything up as they overreacted to the dispensary boom.  Sure, some greedy dispensary owners helped the politicians draft their bogus regulation, but you can't blame the whole industry for the actions of a few.

I don't go to dispensaries anymore because of the new laws, and even when I did it was just to sample a strain that I was thinking about growing or to buy some seeds, or to sample some edibles.  As I see it, the dispensary movement has positively impacted patients in the following ways:1) Lower prices.  This may piss off street dealers like you HCC but it is generally good for patients.2) Variety.  With so many options available, patients can now fine-tune their treatment using the specific strain that is best for their needs.3) Non-smoking medication options.  I hardly smoke at all anymore.  Most of the plants I grow get turned into hash which is used to make edibles and tincture.  I would not be doing this now had I not had the chance to sample from dispensaries.4) Lab testing.  I'm pretty sure we would still be judging a strain by look, smell and buzz if it weren't for the dispensaries embracing lab testing.  Not that those are bad things to judge by, but it is an inefficient way to pinpoint the best strain for your particular needs.  Especially if you are looking for high CBD strains.

If you want to be pissed off at someone, start with Romer and his push to destroy this industry.  His overreaction to the dispensary boom is what has been bad for patients.

Donkey Hotay
Donkey Hotay

... and those deemed non-compliant would be thrown to the MMED's new hired mercenaries -- the Federal DEA! ... where they are summarily slaughtered and imprisoned without any allowed legal defense... facing MANDATORY MINIMUM prison sentences.

Half the players in MMJ Dispensary industry are clueless to the Federal laws they are violating on a continual basis, and when the DEA discovers them, by accident, by informant or at the request and information supplied by the CO Dept. of Revenue MMED, the Dispensary players will find themselves in the same uncomfortable reality as Chris "living the dream" Bartkowicz and Pierre "Doctor Reefer" Werner -- a Federal Prison Cell.

-- cultivation of 100 plants or more = MANDATORY 5 Years in Prison, no exceptions, no probation, no mitigation.

-- cultivation of 1000 plants or more = MANDATORY 10 Years in Prison, up to LIFE!

PLUS sentence enhancers which DOUBLE the MINIMUMS, such as locating within 1000 feet of a School, possession of a Firearm, etc.

and BTW, cultivating 500 plants, twice, does violate and achieve the 1000 plant mandatory minimum prison sentence ... as would cultivating 100 plants 10 times ...

Discrimination Is NEVER OK
Discrimination Is NEVER OK

**************ATTENTION MMJ PATIENTS – CALL TO ACTION**************The Bank of Denver Is Closing MMJ Industry Accounts On 10-31-11 – Colorado Patients Need YOUR HelpSTEP 1: Call The Bank Of Denver At 303-572-3600 And Politely Ask Them Not To Close MMJ AccountsSTEP 2: Boycott The Bank Of DenverSTEP 3: OCCUPY BANK OF DENVER - 810 E. 17th Avenue, Denver, CO 80218WE MUST STAND UP FOR OUR RIGHT TO NATURAL MEDICINE!!DISCRIMINATION IS NEVER OK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Publius Ceasar
Publius Ceasar

Sure as hell killed the prices that many growers were used to getting for their produce

Donkey Hotay
Donkey Hotay

The Colorado MMJ "industry" destroyed itself via myopic greed, puerile obnoxious behavior, and abject political ignorance.

Prior to the self-interested, for-profit retail dispensary explosion circa 2008, THOUSANDS of Patients and Individual Private Caregivers managed to function just fine for over 8 years.

Amendment 20 never authorized Retail Dispensaries ... and their bum-rush into Colorado RUINED everything the honest MMJ advocates had worked for and established since 2000.

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