Colorado

Jun 5, 2013 9:07 PM by Andy Koen

Banking conflict remains despite marijuana legalization

COLORADO SPRINGS - Even after state lawmakers passed a series of new laws to implement marijuana legalization in Colorado, one critical issue remains unresolved: banking.

Marijuana business owners are almost universally rejected by bankers in the state because the banks themselves would have to risk closure and prosecution under federal drug and anti-money laundering laws for processing the money.

"The mere acceptance of the deposit is literally the very definition of money laundering," explained Don Childears, President and CEO of the Colorado Bankers Association.

Childears recently served on a state working group to help lawmakers address business-related issues tied to the implementation of Amendment 64. He said there is little the state can do to resolve the conflict.

"The state has no power in this at all, it is purely a federal issue," Childears said.

The banking issue has been a problem since dispensaries first opened across the state four years ago. Childears expects the problem to be compounded by the passage of Amendment 64 which is projected to insert more cash into the system.

"We sympathize with both the industry and the State of Colorado, they can't do business and the state can't tax or regulate something where it can't follow the money," Childears said. "I don't think you can do that in a cash only business."

Congressman Ed Perlmutter (D) Boulder plans to introduce legislation creating an exemption  for states where pot is legal. Perlmutter serves on the House Financial Services Committee and told News 5 in a statement:

"We need to address the public safety, crime and lost tax revenue associated when these legal and regulated businesses operate in a cash-only system. We also need to provide financial institutions assurance that they can make their own business decisions related to legal financial transactions without fear of regulatory penalties or criminal prosecution."

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