Colorado lawmakers OK co-op banking option for marijuana sellers

Thu May 8, 2014 1:47am EDT
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By Keith Coffman

DENVER (Reuters) - The Colorado legislature on Wednesday voted to create the nation's first state-run financial cooperative for marijuana sellers, with the aim of giving newly legalized cannabis retail outlets access to key banking services through the U.S. Federal Reserve.

The approval of the so-called "cannabis credit co-ops" came on the final day of the legislative session, as lawmakers seek to address problems marijuana retailers face in having to operate on a cash-only basis, such as burglary threats.

The proposal's chief sponsor, Representative Jonathan Singer, said the cooperatives are needed because traditional banks and credit unions have been hesitant to serve the burgeoning marijuana industry as long as the drug remains outlawed by the U.S. government.

"This is the final piece to our pot puzzle," said Singer, a Democrat.

The final approval on Wednesday came after both chambers of the General Assembly cleared their own versions of the bill. The bill now heads to Democratic Governor John Hickenlooper for his signature.

Voters in Colorado and Washington state legalized the possession and use of small amounts of cannabis by adults for recreational purposes in 2012. Both states are among 20 that allow the use of cannabis for medical reasons.

The first recreational cannabis shops opened in Colorado in January, and Washington is set to follow suit later this year.

Singer said the cash-only nature of the industry makes pot businesses targets of crime, limits owners' access to credit and capital and hinders the state's ability to track revenues for tax-collection purposes.   Continued...

A fully budded marijuana plant ready for trimming is seen at the Botanacare marijuana store ahead of their grand opening on New Year's day in Northglenn, Colorado December 31, 2013. REUTERS/Rick Wilking