Colorado lawmakers have approved the world’s first banking system designed to accommodate the marijuana industry, The Associated Press reports. After Governor John Hickenlooper signs the bill, it could take effect following approval from the Federal Reserve.
With the recreational sale of weed legal in the state, they have addressed two major issues with the industry, which still deals mainly in cash: The banking system will give marijuana sellers a place to put their money, effectively limiting the dangers of dealing in large amounts of cash, and it would make them more responsible to the IRS. The plan allows pot sellers to operate as a network of uninsured cooperatives, which complies with the U.S. Treasury’s guidelines for banks.
Some banks have resisted working with marijuana businesses, even denying them checking accounts, since marijuana is still illegal on the federal level. The U.S. Treasury outlined conditions under which banks and weed businesses could work together in February, but they did not offer blanket immunity to banks, Reuters reports. Financial industry officials have speculated that federal law must change in order for banks to fully work with the marijuana industry.
Colorado Governor John Hickenlooper has said he supports the bill and is expected to sign it into law, though he had not reviewed its language as of Wednesday, AP said. After that, the Federal Reserve must approve the state bill for it to take effect.
A few banks have already begun accepting marijuana clients under the Treasury’s guidelines. In eastern Washington State, where recreational marijuana will be sold legally beginning in July, the Numerica Credit Union is accepting select pot growers and processors. Some Colorado-based credit unions have also reportedly begun accepting marijuana business clients, though none of have acknowledged the practice publicly.
Another bill the governor will be looking at soon is meant to allocate a portion of tax revenue from pot sales to marijuana enforcement, Reuters said, as well as to fund education initiatives to discourage youths from using the drug. Colorado legislators have also approved a requirement that edible marijuana products must be identified as containing THC.
Countries that do not have a ban on marijuana sales have not implemented banking systems endemic to the weed industry, AP said.