Colorado lawmakers Monday debated — and rejected — a plan for the state to take a more active role in the financing of medical-marijuana dispensaries.
As part of a bill to tweak the state’s regulations for the medical-marijuana industry, state Rep. Tom Massey, R-Poncha Springs, proposed an amendment to create investment trusts for dispensaries. The state Department of Revenue would have set up the rules for the trusts and overseen them.
Massey said the peculiar arrangement was needed because banks — which have to comply with federal law, under which all marijuana sales are illegal — have been reluctant to work with dispensaries. Without access to bank loans or accounts, dispensaries have had to rely on cash transactions. Supporters of Massey’s amendments said such transactions undermine the state’s efforts to audit dispensaries to ensure they are on the up and up.
“When all this is being done in cash, in the shadows, there are a lot of elements that could come up and attract criminal activity,” said Rep. Mark Ferrandino, D-Denver.
Opponents of the amendment didn’t disagree. But they said the proposed arrangement could have an even worse consequence: Making the state a conspirator in federal crimes.
Rep. Mark Barker, R-Colorado Springs, said the trusts would skirt federal money-laundering laws. That could put investors in the trusts — and the state officials who regulate them — in the cross hairs of a federal racketeering investigation.
“There’s no way to get around this,” Barker said. “State law cannot get you out of federal violations.”
Massey’s amendment was defeated on a stand-up, sit-down vote.
Meanwhile, the bigger measure — House Bill 1043 — passed, moving one step closer to becoming law. The bill clarifies several medical-marijuana regulations, including relaxing residency requirements for dispensary employees, making the locations of marijuana-growing facilities public and extending a statewide moratorium on new dispensaries.
After a brief fight, lawmakers also approved a provision of the bill that directs some medical-pot tax revenue to the Circle Program, a substance-abuse and mental-illness treatment program at the Colorado Mental Health Institute at Pueblo. The program’s supporters said it would have to be shuttered if the money was cut.
HB 1043 needs one more vote of the House before heading to the Senate.
