Colorado Pot Credit Union Could Be Open By Jan. 1 Under State Charter

COLORADO:  The world’s first financial institution established specifically for the marijuana industry could be open in Colorado by Jan. 1.

The Colorado Division of Financial Services late Wednesday issued Fourth Corner Credit Union an unconditional charter to operate, the first state credit-union charter issued in nearly a decade.

The next hurdles will be obtaining insurance from the National Credit Union Administration, the federal regulator of credit unions, and getting a master account from the Federal Reserve System.

Gov. John Hickenlooper‘s office called the charter “the end of the line” for the state’s efforts to solve the marijuana industry’s nagging problem: obtaining banking services.

Although the NCUA insurance is not guaranteed — sale and consumption of marijuana remain illegal under federal law — Fourth Corner can operate until NCUA makes its decision.

 

Colorado OKs World’s 1st Pot Banking System

COLORADO: 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 do not allow marijuana businesses access to basic financial services. That has led to fears that the burgeoning marijuana industry can be a target for robberies.

Colorado became the first state to allow recreational pot sales on Jan. 1.

The legislation would allow pot businesses to pool money in cooperatives. However, that will only happen with the blessing of the U.S. Federal Reserve. That has prompted some to argue the legislation could be only symbolic.

Pot Finance Co-Ops Likely To Fail, But They’re Better Than Nothing

COLORADO:  A hurry-up bill that whizzed through the final days of the Colorado legislature to create the world’s first financial cooperatives for the marijuana industry still faces about two years of added preparation, backers now say.

But despite the initial optimism surrounding House Bill 1398, those familiar with the Federal Reserve System — the agency whose approval is required for the whole plan to work — say it’s unlikely to meet with anything but rejection.

Still others say the amount of effort needed to create the co-op system, which is little more than a credit union for the marijuana industry, is a wasted exercise in learning what was already known: that only Congress can make the changes needed to allow the pot industry access to normal banking.

“Arguably it’s all a charade, thinking that some members of the (Federal Reserve) board … will allow access to the payment system,” said Bert Ely, a banking structure consultant in Alexandria, Va. “If the Fed can’t let them in, the legislature’s action has no meaning.”