DENVER (AP) – A judge on Tuesday dismissed a lawsuit that sought federal approval for a credit union aimed at serving Colorado’s marijuana businesses, saying pot is still illegal under federal law.
Fourth Corner Credit Union challenged a decision by the U.S. Federal Reserve Bank of Kansas City to keep the pot bank from accessing the nation’s financial system. The credit union, which was chartered by Colorado in 2014, is not allowed to take deposits or issue credit – leaving many marijuana businesses operating on a cash-only basis.READ MORE: Wildfire Sparks In Ptarmigan Wilderness Above Town Of Silverthorne
Colorado voters decided to legalize recreational marijuana in 2012.
Lawyers for the Federal Reserve argued that giving marijuana businesses access to the nation’s banking system is too risky, saying that despite guidance about pot banking from the Department of the Treasury, marijuana money should not be allowed into the nation’s central banking system as long as the drug remains federally outlawed.
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U.S. District Judge R. Brooke Jackson dismissed the lawsuit Tuesday because federal law prohibits the drug.
He said the U.S. Department of Justice has pointed out that Congress still deems marijuana dangerous, and that financial institutions that deal with money generated by the pot industry could be breaking the law.READ MORE: Hector Frias-Chavarria Sentenced For Drunken & Deadly Road Rage Crash
Jackson concluded that the marijuana banking situation is untenable, and he hopes it will soon be resolved by Congress.
The credit union claimed that although marijuana remains illegal under federal law, the Federal Reserve as a quasi-government institution lacks the authority to keep marijuana banks out of the nation’s financial system. Mark Mason, an attorney for the credit union, argued in December that a pot bank would serve the government’s interest in keeping better tabs on the drug money.
“They intend to take this money out of shadows and off of the street so that they can track it and trace it,” he argued.
Aaron Smith, executive director of the National Cannabis Industry Association, said Tuesday that Jackson’s ruling sends the message that Congress must act.
“There’s no shortcut, there’s no Band-Aid, there’s no workaround to fix this industry-wide,” he said. “Forcing cannabis businesses to operate without banking access is a crisis, affecting public safety, law-abiding businesses and the state officials in charge of regulating them.”
– By THOMAS PEIPERT, Associated Press with contributions by Kristen Wyatt, AP WriterMORE NEWS: High COVID Plateau In Colorado Somewhat Dependent On Vaccines For Children
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