Monday, September 1st11.8°C
22817
22916

Colorado lawmakers approve plan for first financial system specifically for marijuana industry

Colorado lawmakers approved the world's first financial system for the marijuana industry Wednesday, a network of uninsured co-operatives designed to give pot businesses a way to access basic banking services.

The plan seeks to move the marijuana industry away from its cash-only roots. Banks routinely reject pot businesses for even basic services such as checking accounts because they fear running afoul of federal law, which considers marijuana and its proceeds illegal.

The result: Pot shop owners deal in large amounts of cash, which makes them targets for criminals. Or they try to find ways around the problem, like drenching their proceeds in air freshener to remove the stink of marijuana and try to fool traditional banks into accepting their money.

"This is our main problem: Financial services for marijuana businesses," said Sen. David Balmer, R-Centennial. "We are trying to improvise and come up with something in Colorado to give marijuana business some opportunity, so they do not have to store large amounts of cash."

Colorado became the first state to allow recreational pot sales, which started Jan. 1. Washington state will follow suit, with retail sales expect to start in July.

The U.S. Treasury Department said in February that banks could serve the marijuana industry under certain conditions. With the industry emerging from the underground, states want to track marijuana sales and collect taxes. It's a lot easier to do that when the businesses have bank accounts.

But most banks have shrugged at the Treasury guidelines, calling them too onerous to accept marijuana-related clients. The result is a marijuana industry that still relies largely on cash, a safety risk for operators and a concern for Colorado's pot regulators.

"This is not something that we can wait for any further," said another banking sponsor, Rep. Jonathan Singer, D-Longmont.

The bill approved Wednesday would allow marijuana businesses to pool money in co-operative s, but the co-ops would on take effect if the U.S. Federal Reserve agrees to allow them to do things like accept credit cards or checks.

Democratic Gov. John Hickenlooper supports the pot bank plan and is expected to sign it into law, though a spokesman said Wednesday the governor had yet to review the final language.

Lawmakers from both parties supported the banking co-ops as a way to properly audit marijuana shops and to make sure they're paying all their taxes. Dispensary owners came to the Capitol this session to tell of their difficulties paying taxes and utilities in cash and the dangers of dealing in cash.

"It is very easy to see somebody get killed over this issue," Marijuana Industry Group Director Michael Elliott testified last month.

The plan had bipartisan support, though some Republicans said that the effort won't pass federal muster.

A few banks are accepting marijuana clients in light of the federal regulations.

Numerica Credit Union in eastern Washington state is accepting limited business from marijuana growers and processors, The Spokesman-Review reported Wednesday.

Colorado pot shop owners say a small number of credit unions will do business with them, too, though no banks or credit unions have said so publicly.

Countries that don't ban marijuana don't have banking systems unique to the drug.

___

Kristen Wyatt can be reached at http://www.twitter.com/APkristenwyatt

___

Online:

House Bill 1398: http://bit.ly/1njtnLc

The Canadian Press


Read more Business News

21807


Recent Trending




Today's Market
S&P TSX15625.73+67.561
S&P CDNX1023.991.62
DJIA17098.4518.88
Nasdaq4580.271+22.577
S&P 5002003.37+6.63
CDN Dollar0.9210+0.0016
Gold1281.70-2.1001
Oil95.96+1.29
Lumber349.60+2.60
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.08+0.01
Anavex Life Sciences0.25+0.01
Metalex Ventures0.0750.00
Russel Metals36.48+0.09
Copper Mountain Mining2.93+0.02
Colorado Resources0.180.00
ReliaBrand Inc0.10+0.001
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



23057

FEATURED Property
1919561680 Old Meadows Road, Kelowna
2 bedrooms 2 baths
$293,900
more details
image2
Click here to feature your property
Please wait... loading


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...

_








Member of BC Press Council


22810