Marijuana and Cannabis News

Colorado Plan Would Have Bypassed Banks Wary Of Pot Shops
By Steve Elliott ~alapoet~ in Dispensaries, News
Tuesday, April 12, 2011 at 1:20 pm
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Photo: Education News Colorado
Rep. Tom Massey: "It's not going to go away. It's a legitimate business in Colorado."
Colorado lawmakers on Monday debated and rejected a plan for the state to back an investment bank for the medical marijuana business. The plan would have meant the state was taking a more active role in the financing of medicinal cannabis dispensaries.

As part of a bill to tweak regulations for the medical marijuana industry, state Rep. Tom Massey (R-Poncha Springs) proposed an amendment to create investment trusts for dispensaries, reports John Ingold at The Denver Post. The state Department of Revenue would have overseen the trusts and set up the rules for them.

"This will legitimize this business, bring them into the light of day," Massey said, reports Kristen Wyatt of The Associated Press.

"It's somewhat like a Chicken Little situation for law enforcement -- they just want it to go away," Massey said. "And it's not going to go away. It's a legitimate business in Colorado."

The unusual arrangement was needed, according to Massey, because banks -- which have to comply with federal law, under which all marijuana sales are illegal -- have been skittish about working with marijuana dispensaries. Without access to bank loans or even accounts, dispensaries have had to rely on cash transactions.

Such transactions undermine the state's efforts to audit dispensaries, according to supporters of Massey's amendments.

"When all this is being done in cash, in the shadows, there are a lot of elements that could come up and attract criminal activity," claimed Rep. Mark Ferrandino (D-Denver).

Those opposed to the plan didn't disagree with that. But they said the proposed arrangement could do something even worse, in their eyes: Making the state of Colorado a conspirator in federal crimes.

"I understand the problem of dealing with cash," said Rep. Claire Levy (D-Boulder), but it puts the state in the business of investing in marijuana centers."

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Photo: Colorado Springs Gazette
Big hat, no balls: Rep. Mark Barker (R-Colorado Springs): "I think this puts us all at risk"
​The trusts would skirt federal money-laundering laws, which could make investors -- and the state officials who regulate them -- the targets of a federal racketeering investigation, according to Rep. Mark Barker (R-Colorado Springs).

"There's no way to get around this," Barker claimed. "State law cannot get you out of federal violations."

"My biggest problem is that we are not only putting our state agencies, but our citizens, at risk of violating federal law," said Barker, who seems to be blissfully unaware that every single medical marijuana law for the past 13 years has already done exactly that. "I think this puts us all at risk."

But racketeering is already occurring in the state, making those who voted to strip the investment fund from the bill due to Barker's amendment responsible for it, argued Josh Stanley of the Medical Marijuana Industry Group, reports Joseph Boven at The Colorado Independent.

"Racketeering is happening now," Stanley said. "They say we don't want money coming in from out of state -- tough shit -- money is coming in from out of state, but it is coming in black bags -- cash -- at 35 percent interest."

Massey's investment fund amendment was defeated on a stand-up, sit-down vote.

Meanwhile, HB 1043, the bigger measure to which the investment bank plan was an amendment, passed and moved one step closer to becoming law. The bill relaxes residency requirements for dispensary employees, makes the locations of marijuana growing facilities public and extends a statewide moratorium on new dispensaries for one year, to summer 2012.

It also sets up privacy requirements for how dispensaries handle patient records, and requires caregivers who grow cannabis in their homes to register with local authorities.

In addition, the bill sets a new 500-plant limit for makers of infused cannabis products such as marijuana brownies. Dispensaries would also be limited to selling no more than six nonflowering plants to a patient within a three-month period.

HB 1043 needs one more, more formal vote in the House before going to the state Senate.

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