DENVER (10/26/15)--The first financial institution founded to serve the marijuana industry was handed another monkey wrench last week in its quest to begin legally serving businesses associated with recreational marijuana in Colorado.
After Fourth Corner CU, the organization aiming to serve pot businesses, filed a lawsuit requesting approval of a master account from the Federal Reserve Bank of Kansas, the reserve bank asked a federal judge to toss the suit, citing that allowing the credit union to gain a master account would be tantamount to facilitating criminal activity (Denver Post Oct. 22).
“Even transporting or transmitting funds known to have been derived from the distribution of marijuana is illegal,” the Federal Reserve Bank said in its motion to the U.S. District Court in Denver.
The credit union can’t open its doors without a master account. It’s been waiting for approval on the matter since December, despite the process typically only taking several weeks, according to the Post.
Until federal law deems recreational marijuana legal, however, the fed says it will not allow any money tied to the industry into the federal banking system.
Meanwhile, the state’s legal marijuana industry continues to operate largely unbanked. The credit union’s proponents say that barring the industry from access to financial services creates dangerous situations for its businesses, which in most cases work solely in cash.
Advocates such as Michael Elliott, executive director of the Marijuana Industry Group, continue to push for legislation that would legalize serving marijuana businesses.
Elliott told the Denver Post that the issues remains a public safety problem that exists because federal law has not yet been updated.