Pubdate: Mon, 12 May 2014
Source: Rocky Mountain Collegian, The (Colorado State U, CO Edu)
Copyright: 2014 Rocky Mountain Collegian
Contact: http://www.collegian.com/home/lettertotheeditor/
Website: http://www.collegian.com/
Details: http://www.mapinc.org/media/1370
Author: Zack Burley

MARIJUANA BANKING BILL SHOWS GOOD FAITH

Following the landmark 2012 legalization of recreational marijuana in 
Colorado and subsequent opening of retail pot shops in 2013, Colorado 
has raised twenty-five million dollars in tax revenue.

In a report published by the Office of the Governor in February, 
Governor John Hickenlooper estimated that sales of medical and 
recreational marijuana could break one billion dollars, which would 
earn the state 134 million dollars in taxes.

Clearly, the new marijuana economy is off to a booming start. As with 
all new processes, however, there are a few kinks in the system, most 
notably in the financial area.

Because possession and sale of marijuana is still illegal under 
federal law, large banks and credit unions have been wary of 
extending services to marijuana retailers. This has meant that the 
owners of pot shops have been operating on a cash only basis. While 
cash is flexible, it comes with a host of problems, including the 
ease of burglary.

Last Wednesday, the Colorado state legislature passed the "Marijuana 
Business Access To Banking Act of 2013," a bill that would allow 
owners access to basic banking services, such as credit, and the 
ability to create "Cannabis Credit Co-ops"--essentially a collective 
of owners that would be able to create and sustain their own lines of credit.

There are some unknowns that may doom the bill, most notably in the 
interaction between the pot collectives and the U.S. Federal Reserve, 
which may not allow the co-ops to function, as marijuana is still 
illegal under U.S. Law.

Though the bill faces an uncertain future, the passage of the law is 
an act of good faith by the Colorado state legislature.

The most obvious perk to the passage of this bill is that everyone 
benefits. The state continues to rake in a large amount of tax 
revenue, and the owners are now allowed greater flexibility in the 
financial elements of the business. The customer also benefits, as he 
or she will now have greater flexibility in purchasing marijuana.

There are three more reasons that the passage of the law is a very 
good thing. By passing it, the assembly has untied one of the biggest 
knots left in the process of legalization.

Additionally, the state has shown that they will listen to the needs 
of the owners--those taking the largest risk in this new venture--and 
aid them, instead of simply taking tax revenue off the top and 
letting the owners figure it out for themselves.

This is great news, because instead of pointing at the tax revenues, 
patting themselves on the back, and saying "Ehh--That's good enough," 
the state assembly is working to improve the efficiency of the system.

Most importantly, the passage of this bill shows that the state 
legislature will honor the decision made by Coloradans in 2012, 
legalizing marijuana in the first place. Instead of fighting what has 
already been decided by the people, the legislature has acted as an 
instrument of the public--the way government is supposed to function.

This is an important turn of events--the path that Colorado is making 
towards the legitimization of pot is one that is being watched 
closely by many other states. If Colorado makes a mess of it, fewer 
states will be willing to take the chance on legalization. In this 
particular instance, the Colorado state legislature got it right.

Whether the bill works in the long run is largely besides the point 
- -- the very fact that the state is taking an active role in the 
legalization process means that they are willing to put up with short 
term setbacks in order to facilitate the stability and growth of the 
trade in the long run.
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MAP posted-by: Jay Bergstrom