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

Thumbnail image for Thumbnail image for senator pat steadman.jpg
Pat Steadman.
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.

Bill 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 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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Donkey Hotay
Donkey Hotay

United States Code: Title 18

§ 1956. LAUNDERING OF MONETARY INSTRUMENTS

(a)

.... (1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity—

........ (A)

...............(i) with the intent to promote the carrying on of specified unlawful activity; or

...............(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

....... (B) knowing that the transaction is designed in whole or in part—

..............(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

..............(ii) to avoid a transaction reporting requirement under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years or both.

Mark Slaugh
Mark Slaugh

Finally a sensible legislator that's in office to solve problems as they develop. Everyone else will need to step up when this bill gets proposed and I can't imagine anyone would be in opposition to this bill.

Robert Chase
Robert Chase

You are easily led, and you are in for a let-down.

Robert Chase
Robert Chase

The General Assembly approved the unconstitutional laws by wide margins, so one might expect them to follow through with this bank bill (but I don't).

Monkey
Monkey

1284, 1043, marijuana DUIs and a marijuana bank. Isn't anyone else tired of our egotistical legislators wasting time and money. How many memos will it take before you realize the feds are not impressed? I can't tell you how pleased I am that our legislators think closing their eyes and putting their hands over their ears while yelling their ideas is appropriate. Create problems so you can fix them, anyone else see a pattern?

Guest
Guest

Excellent point. The federal government now trumps the Constitution. The quicker that both we and our state legislatures give up and accept that states no longer possess rights, the quicker we can continue our slide to fascism.

Monkey
Monkey

I'm with you, the Divided States of America!! You do have to do something first before you can give up, pretending federal law doesn't exist isn't really doing anything. I guess we'll see what the legislators do when it comes time to defend the people affected by their decisions from the laws they've been ignoring. Middle of February sounds like a good time to start. 

Colorado Mmj Patient
Colorado Mmj Patient

If the State is not going to stand up, these MMCs should go after the State for the fees that they paid into it. That will get their attention.

High Country Caregiver
High Country Caregiver

Once and for all dispensaries have no rights and no recourse, they signed them all away in 2010 along with the names of their children and their families future freedom.  I like your ideas of phone calls and making a fuss, but there are clauses about sitting down and taking it like a little bitch in 1284 that dispensaries must now obide by.

Donkey Hotay's Dog
Donkey Hotay's Dog

Good idea! Put all the dispensary's money into one place to make it easier for the feds to seize!

Steadman is in the pockets of the big $$$ dispensaries.

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