Since the legalization of recreational marijuana retail shops have had more green than they know what to do with. There are warehouses full of cash all over the state. Banks are too afraid of the ramifications from the federal government if they provide banking services to these LEGAL businesses.
Things are looking up for dispensaries and retail stores in the Mile High state however. A marijuana banking co-op has gotten its charter from the state and is hoping to open its doors in early 2015.
The Fourth Corner Credit Union still has a lot of hoops to jump through before they are fully operational. One of the biggest things to still happen is to get approval and insurance from the National Credit Union Administration. The credit union is getting the green light at the state level though, with the backing of Governor Hickenlooper as a notable success for the co-op.
The issue for banks and legal pot businesses across the country comes from the fact that marijuana is illegal according to the feds and in order for a bank to do business they need to be insured by the federal government. This conundrum forces pot shops to store ridiculous amounts of cash, pay all their bills in cash, including payroll and they can’t offer credit card services to their customers. Not to mention the bookkeeping headache is causes. Storing large amounts of cash means dispensaries need to pay for beefed up security to protect all their green.
“I’m a pro state’s rights guy, and in Colorado we have legalized,” said Chris Myklebust, the Colorado commissioner of financial services. “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.”
The cash flow for pot stores and other green businesses in Colorado is huge. Federal investigators received a tip from a confidential informant that one particular Denver marijuana store was bringing in $500,00 a month, but tax records from the store showed it had taken $1.4 million for the entire year in question (2011).
This isn’t the only attempt to find a solution to the banking nightmare in Colorado since 2011. Most recently, at the of the May legislative session, a complicated bill was passed. The bill in the words of Rep. Jonathon Singer, “creates a financial-services cooperative for the marijuana industry that’s otherwise up until this point been unbanked. It gives businesses the opportunity to form a cooperative that works like a credit union, but with even more scrutiny — and no federal insurance.”
The Fourth Corner Credit Union isn’t related to the bill that passed. The Credit Union follows standard state credit union licensing, instead of needing approval by the federal government.
The Credit Union is hoping to open up for business January 1. Approval from the NCUA will likely still be pending at that time, but it they are allowed under state law to open for business with licenses still pending. Board Members for the Fourth Corner Credit Union are: Heather Jackson, of the Realm of Caring Foundation (the group behind Charlotte’s Web); Paige Figi, mother of the now-famous poster child for juvenile medical cannabis, Charlotte Figi (namesake for Charlotte’s Web); and Kristi Kelly, founder and CEO of Good Meds, other board members also include a real-estate broker, a disabled veteran and a PR agent.
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1 comment
Finally! You’d think the feds would want to make it easier for those in the cannabis industry to funnel their money into the federally funded banks…then the govt. would have no problem getting their fair shake.