DENVER -- A late bill that would create a state-backed cooperative for Colorado's marijuana industry, still an all-cash enterprise with the businesses barred from using the federal banking system, passed the House on Monday but faces an uncertain future in the Senate.
Introduced just last Wednesday, House Bill 1398 now has just two days to get through the Senate, with opposition from the state's banking industry ramping up.
The legislation would create a state-backed co-op to enable marijuana shops to access checking and merchant services, helping the industry transition away from cash transactions to a more common electronic business model that's less dangerous and easier for the state to track.
"I think getting a banking solution for the marijuana industry is one of the biggest steps we can take in terms of making it a legitimate, totally above board industry," said Andrew Freedman, Colorado's Director of Marijuana Coordination. "As long as it continues to be all cash, we're going to have a hard time understanding what's really going on."
But even if Gov. John Hickenlooper, who supports the proposal, signs the bill into law, an actual co-op can't take shape without approval from the Federal Reserve Bank.
"It's really another opportunity for the state of Colorado to tell the feds one more time we are trying everything we can to find a solution to this problem," said Mike Elliott, a spokesman for the Marijuana Industry Group. "We need Washington to step up and address what is a very scary situation out here and, to be frank, somewhat ridiculous.
"We're trying to bring transparency to this program, but it makes it very difficult for the state to audit these businesses when it's so cash-dominant."
The Colorado Bankers Association, which Hickenlooper's office is hoping to keep in a neutral position on the bill, is reportedly pushing a few amendments to the bill.
On its website, the CBA criticizes the Justice Department's Feb. 14th guidance to Colorado banks that "imposes a heavy burden on them to know and control their customers’ activities, and those of their customers", something that makes compliance all but impossible.
"An act of Congress is the only way to solve this problem," writes the CBA's Don Childears.
The bill is set to be heard by the Senate Finance Committee on Tuesday. Should it survive that hearing, it could be given an initial voice vote on the Senate floor by Tuesday night, just in time for a final, third-reading vote on Wednesday.