It may be a stillbirth. As mentioned here and here, banks refuse to conduct business with legal cannabis-related businesses in Colorado because federal regulations prohibit banks from doing business with merchants who deal with substances deemed illegal by the federal government.
In response, the Colorado legislature passed legislation providing for the creation of “marijuana banks”:
Gov. John Hickenlooper has signed legislation to try to establish the world’s first financial system for the largely cash-only marijuana industry.
The bill signed Friday morning seeks to form a network of uninsured cooperatives designed to give pot businesses a way to access basic banking services.
Banks that fear violating federal law don’t allow marijuana businesses access to basic financial services. That has led to fears that the burgeoning marijuana industry can be a target for robberies.
Here we see a state government attempting an end run around federal regulations. It’s a mild form of nullification at work. Unfortunately, the nature of the new banks requires the Federal Reserve to sign off on the plan, which possibly ensures the plan will never come to fruition.
In much of the country, politicians still seem to think that the legalization of cannabis is some sort of dangerous social experiment (even though cannabis was legal pretty much everywhere on earth prior to the 1930s), but in Colorado, within 18 months of the voter-forced legalization taking effect, people who oppose legalization are now considered the eccentric ones.
“We are trying to improvise and come up with something in Colorado to give marijuana business some opportunity,” remarks one conservative Republican. “This is not something that we can wait for any further,” says a Democrat.
Meanwhile, a member of Congress from Colorado has introduced the Marijuana Businesses Access to Banking Act of 2013 in DC.
Photo credit: DJ Spiess