DENVER (AP) – A Colorado plan to set up the world’s first financial system for marijuana cleared its first hurdle in the state Legislature Thursday, despite deep reservations from supporters that the plan will work.

The bill approved 9-2 by a House committee is prompted by frustration with recent marijuana banking guidance from the U.S. Treasury Department.

The measure would allow state-licensed marijuana businesses to create a financial co-op, sort of an uninsured credit union. The U.S. Federal Reserve would still have to grant permission for the co-ops to provide banking services like checking and credit.

Sponsors acknowledged the plan is a long-shot attempt to again try to move the marijuana away from its cash-only roots without running afoul of federal law. Colorado has struggled for years to find ways to help its pot industry access banks.

“I don’t know whether this will take an act of Congress or an act of God at this point,” joked Rep. Jonathan Singer, D-Longmont and sponsor of the bill.

The pot co-ops also would have to comply with the new federal requirements on banking for the marijuana industry, including filing detailed reports to show that sales revenue is not ending up in the hands of criminal organizations.

However, banking groups testified that Colorado’s banking co-op attempt is destined for failure. State lawmakers tried but failed two years ago to set up a state-chartered bank for the marijuana industry.

“We really do not believe that that will work,” said Don Childers, head of the Colorado Bankers Association.

“It is flatly illegal to deal in any illegal substance or any proceeds therefrom,” said Childers, who testified that the banking guidance issued in February only made banks less likely to accept risky marijuana clients.

Lawmakers seemed resigned to the co-op’s failure. But they sided with marijuana-industry representatives who pleaded for another attempt to give the marijuana industry a way to access financial services.

One former dispensary owner told of trying to pack cash in dryer sheets to hide its marijuana smell from the bank. An industry advocate told of a violent holdup of an industry worker carrying cash in California.

“I’m terrified that something bad is going to happen to someone I care about,” said Christian Sederberg, an attorney who helped lead Colorado’s campaign to legalize pot two years ago.

Colorado’s new marijuana coordinator, an office within the executive branch, signed on to the plan, saying it can’t hurt even if it doesn’t work.

“It’s the next logical step forward,” Andrew Freedman said.

But lawmakers don’t have much time to work on the plan. The banking plan must clear the full House and Senate before next Wednesday, when the Legislature adjourns for the year.

“It seems like we’re throwing spaghetti noodles against the wall to see if they stick,” said Rep. Chris Holbert, R-Parker.

LINK: House Bill 1398

– By Kristen Wyatt, AP Writer

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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