On May 7, 2014, Colorado lawmakers finally approved a bill that would permit the creation of financial services cooperatives for licensed marijuana businesses across the state.
The bill, signed by Colorado Gov. John Hickenlooper, came just a few months after the Justice Department issued a ruling that now allows banks to provide financial services legally to all Marijuana merchants.
Yet, banks are still hesitant to provide financial services to these merchants because under the federal law, marijuana is still illegal. This, in turn, led many businesses to operate on a cash-only basis. And for Hickenlooper, such practices are “an invitation to corruption and criminal activity.” Even the US Atty. Gen. Eric Holder said that such significant amount of cash handled by businesses, when not appropriately deposited, is already a cause for concern.
Such challenges have then brought the bill into the spotlight as a win-win solution for legal marijuana merchants.
The bill stipulates that cannabis credit cooperatives cannot refer to themselves as credit unions or banks. That means that they do not need deposit insurance. In addition, they will also be subject to taxation.
Colorado is the first state in the US to legalize the use of marijuana for recreational purposes. Thus, any form of consumption, such as eating, smoking, and vaporizing are allowed within the state.