Colorado lawmakers approved the world’s first financial system for the marijuana industry Wednesday, a network of uninsured cooperatives designed to give pot businesses a way to access basic banking services.
The plan seeks to move the marijuana industry away from its cash-only roots. Banks routinely reject pot businesses for even basic services such as checking accounts because they fear running afoul of federal law, which considers marijuana and its proceeds illegal.
The result: Pot shop owners deal in large amounts of cash, which makes them targets for criminals. Or they try to find ways around the problem, like drenching their proceeds in air freshener to remove the stink of marijuana and try to fool traditional banks into accepting their money.
“This is our main problem: Financial services for marijuana businesses,” said Sen. David Balmer, R-Centennial. “We are trying to improvise and come up with something in Colorado to give marijuana business some opportunity, so they do not have to store large amounts of cash.”
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Colorado became the first state to allow recreational pot sales, which started Jan. 1. Washington state will follow suit, with retail sales expect to start in July.
The U.S. Treasury Department said in February that banks could serve the marijuana industry under certain conditions.