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Colorado Law Sets up Marijuana Banks; Feds Must Approve

Marijuana Retail Industry

Plan to establish the world's first state-level banking system for the marijuana industry

DENVER — Colorado Gov. John Hickenlooper signed a bill designed to create the world’s first state-level banking system for legal cannabis companies, which lack access to basic banking services creating dangerous and difficult risks. 

The Associated Press reports Hickenlooper officially signed the bill Friday morning. The bill allows legal marijuana stores to create a network of uninsured cooperatives that would help them gain access to credit and marijuana merchant services.

A lack of access to banking has been a major problem for Colorado’s recreational cannabis vendors, which have been legally operating in the state since Jan. 1. 

However the problem with the bill is that it does nothing to address the law that is blocking legal cannabis businesses from banks in the first place. Marijuana, which is still classified as a Schedule I drug, remains illegal under federal law. As a result, banking institutions will always be wary of taking on cannabis companies as clients, even in states where some form of the plant is legal.

Even if the bill can secure marijuana cash-flow through the state, at this point it's all up the approval from the Federal Reserve.