When Alex Mason, a gregarious 25-year-old South Carolina native, moved to Colorado in 2012 to pursue advanced wilderness EMT certification and a passion for mountain climbing, he never imagined that he would end up founding the world's first financial institution dedicated to the legal cannabis industry. That institution, the Fourth Corner Credit Union, received a green light from state banking regulators in November, and is set to open in downtown Denver by mid-January.
"I always saw myself as an outdoorsman who would one day climb the highest mountain," Mason says. "Maybe that mountain was trying to figure out how to help the legal cannabis industry get banking services."
But Mason couldn't scale that peak alone. So he recruited his family – father Mark, mother Rhoda and sister Delaney – to assist with his budding idea.
"Alex called one Sunday in February and I could sense in his voice he was really passionate about this issue," recalls Mark Mason, a South Carolina attorney. "He wasn't venting. He had an idea to solve this problem. He said, 'Dad, the legal cannabis industry needs to start its own credit union.' Everyone said it could not be done, but no one had actually tried."
The problem that needed solving was a big one: Although the U.S. Department of Treasury released banking guidelines for state-licensed marijuana businesses last year, most banks and credit unions still steer clear to avoid bureaucratic red tape and risk of hefty fines, since weed is illegal on the federal level. As a result, ganja entrepreneurs can have a hard time finding both legitimate funding and a secure place to stash what money they have and make.
"The serious public safety concerns of a cash-heaving marijuana industry gave rise to an urgent need for a banking solution," says former Denver City Attorney Doug Friednash, who assisted in drafting the city's regulations governing cannabis and helped credit union organizers navigate complex legal issues. He says that the founding of the Fourth Corner Credit Union "is a major public safety victory. It will also provide safe, regulated services to marijuana businesses allowing this laboratory of democracy to thrive."
For Alex, his motivation to found the credit union came from a more personal and emotional place. "I didn't think it was fair that my friends in Colorado's legal cannabis industry were deprived of the one tool they really needed to succeed – access to banking," he says. "They are legal. They pay taxes. They provide good jobs. They used the system to change the law, but now the law was punishing them for no reason.
"When I also learned that some charities helping sick children with epilepsy, people with cancer and Parkinson's disease, could not get bank accounts, I really knew someone needed to solve this problem."
Alex started doing research and he discovered that almost any group that shares a common bond can form a credit union, according to state banking laws, but it's a rigorous process. "As I read about the common bond requirement for credit unions, I thought to myself that no industry has a stronger common bond than the legalized cannabis industry," he recalls. "They have had to stick together, first to emerge, then to survive and now to grow."
Next, he called his dad, and within a month, the father-son duo established an office at the Daniels & Fisher clock tower in Denver. "I slept there on the floor on a blow-up mattress for months and stayed in the clock tower building, working so long that Alex started calling me Rapunzel," Mark Mason recalls, laughing.
As helpful as he was to the process, Mark says that it was Alex's cannabis connections that enabled Fourth Corner's team to complete the due diligence required to receive the credit union charter. "Without Alex telling his friends it was OK to talk to us, our questions would not have been candidly answered," the elder Mason explains. "I look too much like 'the Man,' an FBI agent or something, and so did the other experts on the team. This couldn't have happened without the legal cannabis industry being open and honest with us."
While Alex and his father dealt with the legal issues surrounding the credit union, his mother, Rhoda, dove in to manage the inquiries received from many people wanting to work on the historic project. "If someone reaches out to you, they deserve a response," Rhoda says. "I got an inquiry from a highly qualified supporter who wanted to volunteer to help with the project. When he came to meet, he gave us a piece of the Berlin Wall, which he got when the wall came down. He said that what the team was doing to finally legitimize the cannabis industry by providing access to banking was like 'taking down the Berlin Wall.'" Rhoda used her own historical metaphor to inspire the family: "When things got rough, I told the team that the Wright Brothers did not fly on the first attempt," she recalls, "and they needed to hang in there and keep working to get this landmark project off the ground. "
Alex's sister, Delaney, did her part to help the project take flight by meeting with Colorado Governor John Hickenlooper to lobby for the credit union. "I wanted to help because I had learned in a college class about Paige Figi, a mother who used hemp oil to stop her daughter Charlotte's seizures and then worked tirelessly to change the law in 14 states so other children could have the same chance," says Delaney, a criminal justice major at Western Carolina University and aspiring lawyer who lives in Asheville, North Carolina.
Figi, who has gained international recognition for her efforts to promote CBD oil, became a member of the credit union's board of directors. Denver City Council member Chris Nevitt is also a founding board member, and other cannabis industry advocates, business owners and community leaders have been instrumental in creating the credit union as well, according to Alex. They assembled a team of lawyers and bank regulation experts, including Martin Kenney, an anti-money laundering expert who recently received a lifetime achievement award for fighting financial fraud around the globe.
"The Fourth Corner Credit Union holds the promise of getting an estimated $650 million in proceeds of annual cannabis sales per year in Colorado off of the streets and into a safe and well-regulated environment," Kenney says. "The centerpiece to the Fourth Corner Credit Union will be a highly intelligent, cutting-edge anti-money laundering compliance unit."
Yet, despite all the people championing it, the credit union still has hurdles ahead of it. Fourth Corner has applied for federal deposit insurance, but the application review could take up to two years, according to organizers. Fortunately for them, state-chartered credit unions can open while federal deposit insurance is pending, according to a little-known Colorado banking law. In the interim, deposits will be protected against theft by a federally approved surety bond, organizers say. If the federal insurance is ultimately denied, the credit union can ask the Colorado Division of Financial Services to allow it to operate under private deposit insurance, according to state law.
The division's commissioner, Chris Myklebust, who granted the charter for the credit union, says that the final decision about deposit insurance will be made after the National Credit Union Administration reviews the insurance application. "If the NCUA says no, all other options are on the table for consideration," Myklebust says. "We need to get the legal marijuana industry banked."
Along with serving ganja entrepreneurs, the non-profit financial cooperative will offer checking and savings accounts to any person who joins one of these organizations: Marijuana Industry Group, Medical Marijuana Industry Group, Cannabis Trade Council, National Cannabis Industry Association, Cannabis Industry Association, Cannabis Business Alliance, NORML, Rocky Mountain Hemp Association, Realm of Caring Foundation, the National Brain Tumor Society and Project Wounded Ego.
Once the credit union is open, Alex plans to launch a non-profit foundation to promote research into medicinal benefits of cannabis and grant life-changing wishes to people with life-threatening medical conditions. "My friends in the legal marijuana business have been given an amazing opportunity, and they all want to do good things for society," he says. "Charitable work is important to me and to them.
"TFCCU is much more than "the pot credit union" as it has been called in some news articles," Alex continues. "It represents a social movement by people connected by a common bond of support for legalized marijuana, personal liberty and state's rights."
Editor's Note: The writer of this article, Missy Baxter, passed away shortly after filing the story. We send our deepest condolences to her friends and family.