With federal banking still out of reach, Gov. Jared Polis unveiled new strategies Monday to entice Colorado banks, credit unions and money transmitters to work with cannabis companies and become leaders in providing financial services to marijuana and hemp businesses.
Polis’s plan renews the state’s commitment to creating a regulatory landscape that affords cannabis businesses access to services widely available to other legal industries, while offering financial institutions support to navigate the industry’s federal grey area.
Because marijuana remains a controlled substance under federal law, Colorado’s dispensaries, cultivations and other businesses have been prohibited from obtaining conventional financial services, such as lines of credits or loans, and the ability to accept credit cards.
Federally, the Secure and Fair Enforcement (SAFE) Banking Act aims to open up those opportunities for legal businesses in states where medical and recreational marijuana is available. The bill passed the House of Representatives in September and is currently being discussed by a Senate committee. Legislators are hopeful it will be put up for a vote sometime in 2020.
Until then, Colorado has to “an obligation” to make headway, Polis said.
“The lack of banking opportunities and access to other financial services in Colorado really poses both an economic threat and a public safety threat,” Polis said at a news conference. “Colorado has been a leader in regulating cannabis and this is another step in the right direction, in this case for money to be out of the shadows, out of the cash market and into our conventional financial services sector.”
Currently, just “a handful” of banks and credit unions work with the state’s marijuana companies, said Patty Salazar, executive director of the Department of Regulatory Agencies. The governor hopes to increase the number of institutions by identifying the hurdles to becoming involved in this facet of the industry, providing guidance to regulations currently in place — such as suspicious activity reporting — and developing innovative policies to promote progress in this sector.
“State-chartered financial institutions are state-based, community-focused institutions, and at the core of their mission is to provide quality, affordable financial services that meet the needs of our Colorado communities,” Salazar said. “This roadmap is the commitment from the state of Colorado to clear the road for those who wish to serve in the space.”
Burglary is the most common crime at marijuana dispensaries and cultivations, and experts say it’s because they are forced to deal in cash. Modern banking also helps prevent money laundering and other financial crimes, said Sundie Seefried, CEO of Partner Colorado Credit Union, which manages more than $200 million in cannabis-related funds monthly.
“As the cannabis industry continues to grow rapidly and cannabis businesses mature into a sophisticated industry, banking must keep up,” Seefried said.
Echoing Polis, Ron Kammerzell, interim executive director of the Marijuana Industry Group, said, “This is a public safety issue as much as it is a business issue. We applaud the governor’s effort to seek some progress.”