DENVER — Colorado has granted a charter for the first financial institution to serve its cash-only marijuana industry.
However, before it can open permanently for business, action is also required by the National Credit Union Administration and Federal Reserve.
The Colorado Division of Financial Services issued the charter Wednesday to The Fourth Corner Credit Union, which could open in January, The Denver Post reported Thursday (http://dpo.st/11CYeJF).
The charter is a step toward resolving a significant problem for the industry, which generally is unable to obtain traditional banking services. As a result, dispensaries frequently transport cash — a crime risk — and use currency to pay employees, expenses and taxes.
Pot remains illegal under federal law, but the U.S. Treasury and Justice departments announced in February that banks could open accounts for state-licensed marijuana businesses — with many conditions.
Banks have said the guidelines do not erase the threat of prosecution if they handled money for illegal players in the industry.
Fourth Corner must get a master account from the Federal Reserve and insurance from the National Credit Union Administration. Fourth Corner can operate until the NCUA makes a decision on the latter.
Attorney Mark Mason, an organizer of Fourth Corner, said the NCUA review could take as long as two years.
"Now, the NCUA can come and look to see how it is functioning, and determine if they will issue the insurance, as they've issued to all the other 2,512 state-chartered credit unions in the nation,'' Mason told the Post.
Fourth Corner, whose board members include Denver Councilman Chris Nevitt, intends to serve any legal marijuana enterprise. It also will serve nonprofits that support legal pot, said attorney Douglas Friednash, who incorporated the credit union after the charter was approved.
The Legislature previously allowed the creation of a marijuana co-operative that would operate like a credit union but depend on other federal regulations. But no co-operative has been formed.
"This is the end of the line from the state's side. We've done all we can do,'' said Andrew Freedman, director of marijuana co-ordination for Gov. John Hickenlooper.