Pot Industry's Homegrown Credit Union Squares Off Against the Fed

PotBankstheFeds.jpg

Marijuana has been legal in Colorado for medicinal purposes since 2009, and for recreational uses since last year. Many satisfied voters celebrate on the daily by toking up with a little less bud-induced paranoia.

As a result, most weed shops in Colorado conduct business entirely in cash. Which is why, the New York Times reported, a group of entrepreneurs is hoping to open Colorado’s first credit union specifically created to serve pot-selling businesses. But hold your applause, ladies and gents: Their efforts are being strangled by, shall we say, federal green tape. Here’s the Times:

[Mark] Mason, 54, … and a group of other entrepreneurs in Colorado want to start the first-ever financial institution established specifically to serve the pot industry. To do that, they need to make deposits in a Federal Reserve account, and the agency hasn’t let them. Such humdrum administrative decisions are made all the time by federal banking officials, but this one raises big political and legal issues between the federal government and the state of Colorado over the legalization of marijuana.

Before we get blunt about the details, we’d like to issue a brief PSA (Pot Sustainability Announcement): Weed growing, illegal or otherwise, can have a serious impact on the environment from blazing energy costs to harshing the local landscape.

Because legal marijuana, with robust environmental regulations, can be easier on the Earth, I kinda like the idea (Not to be confused with my own personal beliefs about marijuana-usage, grandma!). Making financial institutions available to small business owners is a step towards a greener planet (in, uh, a couple of ways).

Back to the green-cash-money problem: Because weed isn’t nationally legalized, banks put themselves at risk of prosecution for money laundering. They also have a harder time getting insured by larger financial institutions.

And so, Colorado’s weed shop owners are feeling the consequences of a bank-challenged industry: Some have had their bank accounts repeatedly cancelled, others keep cash bolted tight in safes on the shop floor, and all pay high federal tax rates.

Colorado is not likely to strike out the law now, even with neighboring governments suing the state for Colorado-grown pot entering their borders. And since only 5 percent of Colorado’s weed sellers use financial institutions, the state’s economy is craving pot-friendly credit unions.

If Mason is able to limbo under the existing banking regulations and open the doors to the first financial pot joint, it could mean another step toward a cleaner weed industry. And that’s something we’d be stoked about.

This story was originally published on Grist.


Be the first to comment

Please check your e-mail for a link to activate your account.

Leaderboard

1
+1456sc earned social capital
2
+352sc earned social capital
3
+228sc earned social capital
4
+178sc earned social capital
5
+172sc earned social capital
6
+138sc earned social capital
7
+135sc earned social capital
8
+129sc earned social capital
9
+120sc earned social capital
10
+118sc earned social capital
11
+115sc earned social capital
12
+115sc earned social capital
13
+112sc earned social capital
14
+104sc earned social capital
15
+97sc earned social capital
16
+96sc earned social capital
17
+94sc earned social capital
18
+92sc earned social capital
19
+92sc earned social capital
20
+92sc earned social capital