Banking has been a pain in the collective butt of the legal weed industry.
With medical or recreational weed legal in more than half the country, wouldn’t you think the Federal Reserve would be dying to get its hands on some of the green being generated?
The federal government’s stubborn insistence on keeping cannabis a Schedule 1 drug adds to the confusion that has produced a sickly gray area, exposing the millions who work in the industry to an endlessly confusing, inconvenient and, worse yet, dangerous legal situation.
“This business environment is an invitation to tax fraud, robberies, money laundering and organized crime,” lawmakers wrote in a letter at the end of last year in the hope of convincing the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to lighten up.
But, alas, FinCEN and the rest of the federal government, dug in their vindictive pot-hating heels.
However, a teeny light has been spotted at the end of the tunnel.
A marijuana credit union won a small victory in its quest to provide banking services to pot businesses in Colorado.
The Fourth Corner Credit Union had announced it plans to serve Colorado’s mostly cash-only weed industry back in 2014, with the intention of opening in 2015, which would have made it the world’s first financial institution established specifically for the weed industry.
Fourth Corner’s first bureaucratic hurdle to clear was to open a master account with the Federal Reserve Bank of Kansas City, which is required to provide banking services in the United States.
The credit union’s request was denied by a lower court.
But the good news is that the 10th U.S. Circuit Court of Appeals vacated the lower court’s ruling.
This new ruling means that Fourth Corner can re-apply for the master account, and if denied, it can take the case to court again, and again.
Colorado, of course, is not the only state where the legal weed industry is experiencing banking and credit union problems.
While some credit unions began offering depository services to weed businesses in April 2014, they tended to charge cannabusinesses higher fees, citing the increased risks and hassles they endured while providing a non-cash environment for the weed companies to function in.
For Fourth Corner Credit Union, more paperwork needs to be done, insurance needs to be purchased and other requirements are still pending, but it is still on track to be the world’s first financial institution to specifically serve the weed industry.
The little credit union that could, persisted and is setting a precedent.
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