Federal Approval Granted to Colorado Credit Union to Serve Cannabis Industry

Cannabis prohibition and the battle to repeal it has been going on for
decades, and only until recently have states began the process of taking
back their freedom—conquering the roadblocks put in place to enforce the
false “reefer madness” stereotype. Now that marijuana is legalized
medicinally, recreationally, or both in 30 of the 50 states in the US, the
Federal Reserve has finally granted a Colorado credit union approval to
conduct business with companies in the cannabis industry. This is a huge
step for the Marijuana industry and the federal laws that keep cannabis
companies and consumers fearful of restrictions or illegalization.
However, before we get too excited we have to read the fine print. While
Fourth Corner Credit Union will be permitted to bank with marijuana service
professionals like landlords (individuals who rent out their property to
cannabis businesses) and lawyers—the credit union is not permitted to
conduct business with dispensaries.

Small Steps, but Still Advancing

While making any sort of advancement should be viewed as progress, it
still leaves thousands of business owners in danger. Banks and credit
unions are required to report any customers they feel may be engaged in
illegal activity to federal authorities, and when it comes to following the
Feds rules— the stakes are high. The FDIC has the power to step in and
shut down any bank they deem necessary, and with little notice. If fact,
there hasn’t been a bank in history that made a “come back” after being
shut down by federal regulators. This is why most banks won’t take the risk
of working with marijuana businesses, even if it is legal to buy and sell in that state.
Not having someone to bank with also leads to safety concerns—the
business or the individual can become targets for robbery, theft and
violence. In one infamous case from 2012, a dispensary owner from
Orange County was kidnapped and tortured by assailants who believed the
businessman had a stash of cash buried in the desert outside of Palm Springs.

Unfortunately burying your cash, while seemingly ridiculous, is not
unheard of in this industry.

The Groundwork to Follow

Although this new advancement does not fully encompass an effective
solution for many of the businesses in this industry, it does bring us one
step closer to the ultimate goal that offers services and protection for all
business owners in the cannabis industry. According to Co-founder of
Fourth Corner Credit Union Mark Mason: “It’s been the mission of the
Fourth Corner Credit Union to bring about fully legal banking to the
marijuana industry. There are many ancillary businesses that have trouble
getting bank accounts because they do business with marijuana.”
To put their money where their mouth is—Fourth Corner went as far as
suing the Federal Reserve Bank after they were prohibited from conducting
business with what they held was a “legitimate and legal” Colorado
industry. This was over three years ago. Needless to say, the fact that the
Federal Reserve has granted Fourth Corner the power to conduct business
with cannabis business owners and operators is a monumental step that
will hopefully lay the groundwork to influence other credit unions and
financial institutions to follow suit.

By Maria Vigil   2/13/2018

 


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