DENVER (CBS4) – Federal Judge Brooke Jackson will decide soon in a case that could determine if the Colorado marijuana industry can use the national banking system.
The pot business in Colorado has been carried on in cash. Because marijuana remains illegal under federal law, the U.S. Federal Reserve Bank has taken a hands-off approach. The Fourth Corner Credit Union argued before a judge to order the Federal Reserve to give them an account so they can service marijuana businesses.
Mark Goldfogel with Fourth Corner said getting access to use banks is critical.
“Sooner or later someone’s life might be in danger because $1.2 billion in transactions in the state of Colorado in 2016 are all in cash,” Goldfogel said.
Because of all that cash it has spawned a spinoff industry — security. Armed guards transport hundreds of thousands of dollars daily.
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One legal observer, Marc Painter of Holland and Hart, said the key issue is doing business involving a product that is federally banned.
“It’s very difficult for a judge to make a ruling in favor where the institution is going to be engaging in an activity that is illegal federally,” Painter said.
Attorneys for the Federal Reserve Bank argued the solution lies in the halls of Congress, not the court. Lawyers for the credit union were asked by the judge what if it was meth they were talking about instead of pot?
“I don’t think Colorado voters would have been so passionate about legalizing meth as opposed to a plant that is helping change the lives of people,” Deirdra O’Gorman of Fourth Corner told CBS4.
Colorado voters said yes to marijuana, but most banks still say no. The two sides in the lawsuit are expected to sit down andtry to reach a settlement.