A relatively new sector of Colorado business has a serious problem that could be easily fixed by a bill up for a hearing today in the state Senate. So the bill is a slam dunk, right? Unfortunately, no.
Like everything affecting the medical marijuana business, Senate Bill 75 is generating controversy. But it shouldn’t, in our view. It neatly solves a problem that exists through no fault of medical marijuana dispensaries — the fact that no bank or credit union will openly accept their business.
Apparently some dispensaries have been able to open accounts, perhaps because their names don’t always give away the nature of their business. But we’re told a number of dispensaries are operating as cash-only enterprises — which is a detriment to both safety and accountability.
Yet what are dispensaries supposed to do? Last year, Colorado Springs State Bank closed an estimated 300 marijuana-related accounts for fear the federal government might not look kindly on its policy of welcoming them. And that bank was the only one in the state with such an open-door policy.
SB 75 would allow medical marijuana businesses or patients (or both) to form financial cooperatives to provide critical banking services such as checking.
Unfortunately, Sen. Pat Steadman, the main sponsor and a Denver Democrat, says the banking industry is asking for an amendment to exclude such co-ops from being able to access the electronic payment system that is used to wire money back and forth.
Without such access, checking goes out the window, which is why Steadman thinks such an amendment would make the bill pointless. We hope members of the finance committee see why. After all, we’re long past the day when depositing money in an unbreachable vault satisfies the demands of bank customers.
Colorado enacted a meticulous regulatory regime a couple of years ago when it decided to regulate the growing dispensary industry rather than try to outlaw it. That regulatory oversight naturally relies on a paper trail. In the meantime, however, many dispensaries have found themselves in the ironic position of having to deal in cash — with customers not even able to use credit cards.
Given this contradiction, no wonder Steadman touts his bill as a boon to “the integrity of our regulatory scheme,” since it would help provide an “auditable paper trail of financial transactions.” But he also maintains it’s a safety measure, since piles of cash tend to be magnets for thieves.
We’d like to see the federal government step in and eliminate the conflicts between its comprehensive prohibition of marijuana use and state laws, but that simply isn’t about to happen any time soon. It will take more states adopting medical marijuana exemptions and more members of Congress sympathizing with their voters at home before reform occurs.
In the meantime, Colorado must try to tackle the banking issue on its own. SB 75 will do the trick.
