Colorado Lawmakers Approve Banking Solution For Canna-Businesses
DENVER, CO — Colorado lawmakers approved a plan to set up a network of uninsured marijuana financial services cooperatives to help alleviate stress felt by canna-businesses, caused by operating only in cash.
Colorado Legislators To Allow Financial Co-Ops For Cannabis
Cannabis-related businesses in Colorado have felt strife when it comes to banking despite being legally allowed to operate in the state. As it stands, all cannabusinesses in Colorado are forced to function on a cash-only system.
“HB 1398 suggests that members of the co-ops can pool their resources together, establish checking accounts, and take out loans.”
In turn, this can put them at a high risk of theft from having large amounts of cash around at almost all times. It makes filing their taxes and maintaining payroll difficult as well.
The cooperative template proposed in HB 1398 suggests that members of the co-ops can pool their resources together, establish checking accounts, and take out loans. Co-ops can also make investments on behalf of their members in the form of municipal bonds and then provide other protections as well.
Colorado Bankers Call For Federal Banking Solutions
While the framework of the bill seems promising on the surface, it relies on the Federal Reserve Bank to grant co-ops the ability to accept credit cards and checks. Because of this dependence on federal approval, skeptics believe that this measure will not survive.
Senator Pat Steadman (D) told the Denver Post, “I’ve steadfastly maintained that the solution does not lie in this building, but in Washington. This is a bill we know is imperfect, but it’s something we’re trying to do to force a dialogue on the issue.”
“I’ve steadfastly maintained that the solution does not lie in this building, but in Washington (D.C.). This is a bill we know is imperfect, but it’s something we’re trying to do to force a dialogue on the issue.” – Sen. Pat Steadman
Although the Obama administration has taken efforts in the past to take the pressure off banks by giving them guidelines for working with cannabis-related businesses, many financial institutions refuse to open their doors. According to them, the regulations set by the federal government are too burdensome and difficult for them to comply.
In a statement by Don Childears, President and CEO of Colorado Bankers Association (CBA) says, “An act of congress is the only way to solve this problem. Banking services would greatly resolve state regulation and taxation issues, serve customers and businesses in legal transactions and help public safety.”