Medical marijuana financial co-op proposal poised to move forward

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Pat Steadman.
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.

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Co-sponsor Tom Massey.
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."

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:

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."


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6 comments
Colorado Mmj Patient
Colorado Mmj Patient

This would only be safe if the State had its name on the thing. Otherwise the Feds will wait until the money is in there then seize it all. We need more than a bill. The State needs to have some skin in this.

Monkey
Monkey

John Walsh wrote he would "consider civil and criminal legal remedies regarding those who invest in the production of marijuana". Thats why the state-bank thing fell apart.If anyone is stupid enough to put their cash in a co-op it is the medical marijuana industry. I'm glad my legislators will again be wasting time on my dollar, It really makes me happy. Seems like the final bow on the package to be presented to the feds would be this silly co-op. Do marijuana center lobbyists work for the DEA? Or are they too stupid to realize the ones who will benefit the most from this? One thing is for sure, the ONLY group of criminals you can find willing to put all their money in the same place is medical marijuana center owners, other organized drug dealers have more sense.

High Country Caregiver
High Country Caregiver

It reminds me of 'Back to the Future 2" when Biff has that enormous sky scraper, Biff Towers.  There's going to be a new building taller than all the rest in Denver similar that says "Bank of Marijuana", although Marty McFly is not going to be around to save the future of marijuana.

Guest
Guest

actually, marty fucked up the future by leaving the sports book behind. thats how biff made the money and therefore the tower. so marty fucked shit up with his greed. but great analogy

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