Colorado lawmakers approved the world's first financial system for licensed marijuana businesses with the aim of giving newly legalized pot businesses access to key banking services through the U.S. Federal Reserve, Reuters reported.
The plan, approved Wednesday, seeks to move the marijuana industry away from its cash-only roots. Banks routinely reject pot businesses for even basic services such as checking accounts because they fear running afoul of federal law, which considers marijuana and its proceeds illegal.
Since the drug remains outlawed by the U.S. government, traditional banks and credit unions have been hesitant to serve the burgeoning marijuana industry. The cooperatives will be required to bridge that gap, Representative Jonathan Singer, the proposal's chief sponsor, said.
"This is the final piece to our pot puzzle," said Singer, a Democrat.
After the bill was approved by both chambers of the General Assembly on Wednesday, it will now head to Democratic Governor John Hickenlooper for his signature, Reuters reported.
In 2012, the possession and use of small amounts of cannabis by adults for recreational purposes was legalized by voters in Colorado and Washington.
After the first recreational cannabis shops opened in Colorado in January, Washington is set to follow suit later this year.
"Singer said the cash-only nature of the industry makes pot businesses targets of crime, limits owners' access to credit and capital and hinders the state's ability to track revenues for tax-collection purposes," Reuters reported.
'Under the bill, the financial cooperatives would operate similarly to credit unions - without a deposit insurance requirement - and would be governed by the state's financial services commissioner. But to gain access to banking services such as credit card processing and checking accounts, the Federal Reserve would need to approve the plan, which critics say is unlikely in the absence of a deposit insurance mandate."
Although such enterprises remain illegal under federal law, banks were encouraged by the Obama administration in February to start dealing with state-licensed marijuana suppliers.
The guidance stopped short of promising blanket immunity to banks, and financial industry officials have said they doubted many banks would begin to accept cannabis suppliers as customers without changes in federal law, Reuters reported.
