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.”

Marijuana Co-Op Finance Bill Refuses To Die In Colorado Statehouse

COLORADO:  A late bill to create co-ops to finance the marijuana industry has come back from a near-death experience.

House Bill 1398 got off to a strong start Thursday in the House Business Committee, only to get gutted late that evening in the House Finance Committee before House Appropriations restored the original version Friday morning and sent the measure to a vote on the House floor.

The bill puts a twist on the credit-union model by creating cannabis credit co-ops for licensed pot businesses and their affiliates who are currently blocked from the traditional banking system because of federal prohibitions on marijuana.

“This sets up a structure of a new type of financial structure to the gap we’re seeing between banking and the marijuana industry,” testified sponsor Rep. Jonathan Singer, D-Boulder. “It’s the only solution we see.”