Colorado OKs Marijuana Credit Union
By Steve Elliott
Marijuana businesses in Colorado have plenty of cash flowing in, but are having a difficult time finding a legal place to put it.
Most banks still refuse to work with marijuana businesses, because they fear enforcement of federal banking laws, reports Alizeh Siddiqui at the Marijuana Policy Project (MPP). Cannabis, is, of course, illegal at the federal level. Now, a new credit union designed specifically for the legal marijuana industry hopes to offer a solution, reports Trevor Hughes at USA Today.
The Fourth Corner Credit Union plans to open within two weeks in Denver, offering to accept cash deposits and to allow members to make electronic cash transfers for payroll and rent, and to buy supplies.
"We are on the one-yard line," said attorney Mark Mason, who is advising the credit union's nine founders.
Banking regulators in Colorado granted Fourth Corner a charter on November 19, and now the union is waiting for the Federal Reserve to issue it a master account number, which would give it access to the U.S. electronic banking system. The credit union's organizers believe it will get the number without a fight, because the Federal Reserve is required give out numbers to organizations that have already been granted state charters.
But despite the illegal status of cannabis at the federal level, Colorado's banking regulators said they are respecting their state's laws by approving Fourth Corner. The credit union still needs insurance (from the National Credit Union Administration) and to sign a lease prior to opening.
"I'm a pro states rights guy, and in Colorado we have legalized," said Chris Myklebust, commissioner of financial services in Colorado. "When I pull a $20 bill out of my pocket, and look at the front, it says it's legal tender for all debts public and private.
"Legal businesses in a state should be able to use the currency of the nation," Myklebust said.
The credit union can trace its beginnings to the summer 2013 Cole Memo from Deputy U.S. Attorney General James Cole. That memo sets out eight federal "areas of concern" in marijuana law where federal prosecutors will focus their limited resources, including keeping pot away from kids, preventing its diversion outside legal states, and "preventing the revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels."
Myklebust sees that language as giving a green light to a well-regulated credit union handling cannabis cash. Fourth Corner officials said they can stay within the Cole Memo's confines, because they're going to carefully monitor and track every transacteion.
"If you can't get your cash into the Federal Reserve system, you end up stockpiling it in your home, in caves, in your business," Myklebust said. "At some point, the risk becomes worth it for organized crime. I've never even held a joint but I really want to see them banked."
Many banks and other providers of financial services have been unwilling to work with the cannabis industry
"We consider ourselves regulated, legitimate businesses," said Kristi Kelly, owner of GoodMeds marijuana dispensary and one of Four Corner's founding members. "We just want to have the same access to banking that other legitimate businesses have. I don't want to pay people in cash."