DENVER — A Colorado plan to set up the world’s first financial system for marijuana survived less than 24 hours before state lawmakers changed course Thursday night and shelved the idea.
The proposal would have allowed state-licensed marijuana businesses to create a financial co-op, sort of an uninsured credit union.
The measure was introduced late Wednesday and cleared a House committee on Thursday. But a few hours later, another House committee gutted the plan by amending the bill to say that Colorado will continue studying the problem of marijuana businesses having a hard time accessing banking services.
Lawmakers from both parties expressed reservations about whether the financial-services plan would work.
“Let’s take some time to have this properly vetted,” said Rep. Kevin Priola, R-Henderson, who sponsored the amendment to study the matter.
The measure would have allowed state-licensed marijuana businesses to create a financial co-op, sort of an uninsured credit union. The U.S. Federal Reserve would still have to grant permission for the co-ops to provide banking services like checking and credit.
Sponsors acknowledged the plan was a long-shot attempt to again try to move the marijuana away from its cash-only roots without running afoul of federal law. Colorado has struggled for years to find ways to help its pot industry access banks.
“I don’t know whether this will take an act of Congress or an act of God at this point,” joked Rep. Jonathan Singer, D-Longmont and sponsor of the bill.
Banking groups testified that Colorado’s co-op attempt was destined for failure. State lawmakers tried but failed two years ago to set up a state-chartered bank for the marijuana industry.
“We really do not believe that that will work,” said Don Childers, head of the Colorado Bankers Association.
“It is flatly illegal to deal in any illegal substance or any proceeds therefrom,” said Childers, who testified that the banking guidance issued in February only made banks less likely to accept risky marijuana clients.
Colorado’s new marijuana coordinator, an office within the executive branch, signed on to the plan, saying it can’t hurt even if it doesn’t work.
“It’s the next logical step forward,” Andrew Freedman said.
But lawmakers weren’t persuaded.
“It seems like we’re throwing spaghetti noodles against the wall to see if they stick,” said Rep. Chris Holbert, R-Parker.