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Federal Reserve Blocks 'Marijuana Bank' in Colorado

Many legitimate marijuana businesses are still locked out of the financial system.

Marijuana-related businesses in Colorado are so profitable that the government doesn't know what to do with all of the tax revenue they're generating. But business owners face a more immediate problem: Where to stash their own profits when banks won't take it.

Because marijuana is a federally banned Schedule I substance, most banks have been reluctant to accept deposits from industry businesses. A  clumsy and ambiguous set of guidelines from the federal government, which at least seemed to indicate that banks working with dispensaries operating legally under state law would be shielded from money laundering prosecution, didn't help.

Now the Federal Reserve is muddying the waters further with a court filing against the Fourth Corner Credit Union, which was established specifically to handle Colorado's marijuana cash, according to NBC News

The credit union can't open without clearance from the Federal Reserve, which said in its filing that "transporting or transmitting funds known to have derived from the distribution of marijuana is illegal..."

The Federal Reserve said in the latest filing that bankers won't be led away in handcuffs for taking marijuana money, but they don't have the right to put that money in the Federal Reserve system.

By pushing for approval from the Fed, it was "as if Colorado enacted a scheme to allow trade in endangered species or trade with North Korea," the filing says.

Earlier this year, Reason TV looked into the precarious financial situation that unbanked Colorado business owners find themselves in. We profiled Blue Line Protection Group, a security service that protects the mountains of cash changing hands on a daily basis in the state.

Watch that video above, and click here for the full text, associated links, and downloadable versions. 

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  • Fist of Etiquette||

    The benefits of over-regulation. There are just so many avenues for the government to hassle you if you're doing something they don't want you to do. And there are so many regulators that if one agency is forbidden by lawmakers to interfere a second agency simply has to take over the citizen molestation duties.

  • Eli||

    Obama can also claim he's not responsible because the Fed is independent of the executive branch.

  • AlmightyJB||

    He could deschedule it

  • Sevo||

    Eli|10.25.15 @ 1:41PM|#
    'Obama can also claim he's not responsible because FYTW'

    Sorry, but this is the reason that lying POS does anything, regardless of the bullshit he spouts.

  • Steve G||

    He had a phone and a pen ....but can do jack shit about this apparently.

  • Ben Johannson||

    Fed independence is a myth. It does what Treasury tells it to.

  • GILMORE™||

    "The benefits of over-regulation."

    Is there any other kind?

  • Ben Johannson||

    It isn't a regulation issue but a monetary system issue. You want access to Federal accounts with federal funds, you play by federal rules and the rules are stacked against drug banking. Unless you're RBS or JPMorgan, of course.

  • __Warren__||

    Greenbackers vs greentokers, who will win?

  • Mr Lizard||

    Reposting cuz it's Sunday:

    I would like to thank all you assholes that called for common sense car regulations in the various comment sections.

    http://m.koco.com/news/several.....e/36027322

    And this little gem:

    #paradelivesmatter

  • Francisco d'Anconia||

    Personal foul, the reptile, reposting, 10 yards and loss of down.

  • PapayaSF||

    This sort of drunk driver always puzzles me. I can imagine someone getting plastered and missing a light or a turn or a stop sign, but driving at high speed into a crowd? How does that happen?

  • GILMORE™||

    " How does that happen?"

    Well, I find it usually starts when you start singing along to "Drop Kick Me Jesus Through The Goalposts of Life" and weeping uncontrollably

  • AlmightyJB||

    That may be the greatest country song ever written.

  • DEG||

    I'm partial to this song for best country song ever written.

  • Ted S.||

    This one is worthy of consideration too.

  • Francisco d'Anconia||

  • SQRLSY One||

    Sorry, y'all, y'all are ALL wrong!!!

    "Ghost Chickens in the Sky" is the BEST cuntry sung EVAH!!!

    https://www.youtube.com/watch?v=Pkdci55adqk

  • AlmightyJB||

    I haven't heard that for ages:)

  • Steve G||

  • SQRLSY One||

    Yeah man I can relate to Warren Zevon here Dude...

    My shit used to be all fucked up too...

    Then I dun there smoked some more of that them thar shit and it all got better!

  • Ted S.||

    The crowd was obnoxious?

  • Eli||

    If you look at the pictures, the incident happened in the middle of what normally is a street. My guess would be that she was driving down a familiar street and not paying attention, and didn't see that it was closed for the parade. She probably didn't know she was driving into a crowd until she hit the police motorcycle. The drunkenness merely kept her from reacting to that, turning what would have been a couple of injuries into scores of them.

  • AlmightyJB||

    I wonder hiw long she was driving before she got there. You would think if you're that wasted you wouldn't get very far without running into something.

  • AlmightyJB||

    I don't know how you have major roads closed for a parade and the first thing she runs into is 50 people?

  • Scarecrow & WoodChipper Repair||

    It's also possible that, like most drunks, she saw the motorcycle and her stupefied brain thought it was moving and that was the road. I had a drunk following me into town (pop 100) once, tailgating very safely, and the slower I got, the slower she got, even stopping when I stopped and starting up again once I started. I have always heard it's safer to leave your blinkers off if you have to park on the side of a freeway, so the drunks won't think there's a car to follow and smash into you.

  • AlmightyJB||

    Would not be surprised if you're correct. Very sad.

  • pan fried wylie||

    "as if Colorado enacted a scheme to allow trade in endangered species or trade with North Korea,"

    Totally the same.

  • Scarecrow & WoodChipper Repair||

    Used to be just one Best Korea with its Best Maximum Leader. Now we have two?

  • Tejicano||

    At least it isn't East and West Korea. That would be totally fucked up.

  • Notorious UGCC||

    Incidentally, if the states had simply backed off as soon as the Supreme Court allowed the feds to override state MJ laws, then we wouldn't be having this discussion.

    It's because the states are practicing what judicial supremacists call "nullification" that we're even getting what limited space there is for legalization.

  • Notorious UGCC||

    (Now, I'm using the phrase "override state MJ laws" to include arresting and harassing people whose activities the state wants to be legal.)

  • Cytotoxic||

    BTC

  • Cytotoxic||

    OT: Condom balloon bombs in Syria

    http://www.popsci.com/video-sh.....s-in-syria

  • Francisco d'Anconia||

    Two points:

    1. Aren't they effectively bombing themselves when they come down?

    2.

    The skies above Syria are so crowded with aircraft that Russian pilots can film American drones.

    What the fuck does that even mean?

    It's not real difficult to run an intercept on a drone and then film it. Has nothing to do with how crowded the airspace is.

  • Crusty Juggler||

    I think this is a fairly good article that describes what is going on over Syria.

    And yet time and time again, Russian pilots have shown themselves to be willing to intercept, shadow and sometimes fly dangerous maneuvers near American combat aircraft … even in international airspace. On April 7, a Russian Su-27 Flanker fighter jets nearly hit a U.S. Air Force RC-135U Combat Sent spy plane over international waters in the Baltic Sea.

    The Pentagon’s top headquarters in Europe said that incident was “unprofessional” and Pentagon spokesperson called the Russian pilot’s flying “sloppy.

    On top of simple accidents, this sort of behavior could easily look like a threat — especially in a war zone. Since Washington and its friends are unlikely to cede their rights to self-defense, even a brief communications breakdown – necessitating a phone call between commanders on the ground – risks turning into a disaster.
  • Francisco d'Anconia||

    :-) Back to old games. The world was simpler and more fun when we had one real threat.

  • Crusty Juggler||

    Exactly. Russia is being proactive, and a pilot on either side is either going to take offense or make a mistake, and we are off once again.

  • IceTrey||

    “Even transporting or transmitting funds known to have been derived from the distribution of marijuana is illegal,” said a motion filed Wednesday by the Federal Reserve in U.S. District Court in Denver."

    Aren't the states who are collecting cannabis taxes doing exactly what the Fed won't allow private businesses to do? I mean does Colorado have 100 million in cash stored in a room somewhere? Could Colorado open a state owned bank like the Bank of North Datoka?

  • AlmightyJB||

    Some animals are more equal than others.

  • Cytotoxic||

    Fun fact about Hurricane Patricia: last Tuesday it formed out of the blue into a tropical storm. It became a class 5 hurricane with 270 Kph winds over the course of 30 hours. I wish I could move that fast.

  • IceTrey||

    That's what she said!

  • AlmightyJB||

    "kph"

    Speak English!

  • Scarecrow & WoodChipper Repair||

    He did. He capitalized it, unlike you. Also, it was written, not spoken.

  • AlmightyJB||

    Go back to Oz!

  • AlmightyJB||

    I saw a documentary about this a while back. The retail stores are keeping large amounts of cash in safes. Also, transporting large amounts of cash. Sometimes going to get killed over that at some point.

  • DEG||

    Yep.

    Getting a gun to defend themselves would probably cause a run-in with other Feds.

    “Federal law already makes it illegal for someone to possess a gun if he or she is ‘an unlawful user of, or addicted to’ marijuana or other controlled substances,” the AP reports, accurately enough. “A Sept. 21 letter from the Bureau of Alcohol, Tobacco, Firearms and Explosives, issued in response to numerous inquiries from gun dealers, clarifies that medical marijuana patients are included in that definition. ‘There are no exceptions in federal law for marijuana purportedly used for medicinal purposes, even if such use is sanctioned by state law,’ said the letter by Arthur Herbert, the ATF’s assistant director for enforcement programs and services.” Uh-oh . . .

    It all depends on how you define "user".

  • ||

    "Because we're the Fed and we're not going to sully our reputation and our noble history with illegal money!"

  • __Warren__||

    Perhaps instead of calling themselves The Fed they called themselves The Munchies they would have a different perspective.

  • The Late P Brooks||

    The Federal Reserve said in the latest filing that bankers won't be led away in handcuffs for taking marijuana money, but they don't have the right to put that money in the Federal Reserve system.

    "We accept bitcoin only."

  • James Anderson Merritt||

    See my comment at 6:27PM. Any alternative currency that is put into competition with the US dollar is in violation of Federal law, as confirmed by the prosecution and verdict in the recent Liberty Dollar case. So even those relying on BitCoin should take care.

  • IceTrey||

    So I can't buy pot with Euros?

  • James Anderson Merritt||

    This is a remarkable, "damned if you do, damned if you don't" situation. It is possible for someone to set up an alternative currency, to facilitate State-legal marijuana trade. This currency wouldn't exist "within" the Federal reserve system. However, Federal law prohibits the creation of a currency intended to compete with the official US dollar, as Bernard von Nothaus and the supporters of the Liberty Dollar learned, to their great chagrin and suffering, in recent years. Since the amount of money involved would be SO large, and legal MJ traffic would be everywhere in the State, the "backed by green" "marijuana money" would often be in direct competition with the US dollar: whole businesses and households, and a growing segment of the general State economy would, in many circumstances, prefer it to US greenbacks. In order to break the logjam, perhaps someone in Congress should dust off Ron Paul's "Free Competition in Currency" Act, and pass it with a veto-proof majority in the House and the Senate. This would not directly end the War on Drugs, or even federal marijuana prohibition, but it would at least allow State-legal marijuana producers, vendors, and customers to go about their business in peace.

  • Cytotoxic||

    This may interest you. Seems like a big deal to me. State nullification kind of deal.

  • Tejicano||

    So do the sales in Mexican Pesos.

  • Ben Johannson||

    It's perfectly legal to create your own currency and circulate it. von Nothaus made the error of producing coins that mimicked actual U.S. currency, hence the conviction for counterfeiting.

  • Dread Pirate Roberts||

    If the credit union wants the support of the Fed then it should sell financial derivative products based on subprime mortgages that will never be repaid then bet against its own customers that the product will fail. Of course, in a sane world that would get you locked up and smoking a plant would not.

  • mtrueman||

    'Because marijuana is a federally banned Schedule I substance, most banks have been reluctant to accept deposits from industry businesses.'

    Perhaps these industry businesses could entrust criminals with depositing money with the banks. Laundering criminal drug profits is a service the bankers have been providing criminal enterprises for years now. If it can't be done legitimately, then try the old, tried and true illegitimate ways.

  • Cytotoxic||

    I know you think this is somehow an indictment of those banks but it really isn't. They are heroes.

  • Brooks512||

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    www.homejobs90,com

  • Rockabilly||

    Abolish the DEA, IRS, FED.

    Problem solved.

    Next?

  • jmlandry||

    Audit the Fed, wipe the drug laws.

  • kapuel||

    I offer top quality and quantity medical marijuana for some good hookups.Text to (913)912-3173

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