Colorado marijuana dispensaries have nowhere to put their money

Marketplace Contributor Jul 3, 2014

Let’s say you’re a new retail business owner, and you’ve hit the sales jackpot. The product you’re offering is moving faster than snow-cones in the Sahara, and the cash just keeps coming in.

But there’s one hiccup: You can’t deposit said cash into a bank.

That’s the problem recreational marijuana vendors in Colorado are facing. Because the federal government considers marijuana illegal, and because that same federal government regulates banks, THC retailers in Colorado are sitting on piles of cash they can’t do anything with. These vendors are keeping the mounds of cash in backrooms, specially designed vaults, and specially created security firms to hold the money. Yet, there are still significant security concerns about keeping all that cash on hand (not to mention the hassle when it comes to paying taxes, bills and fees).

The IRS, meanwhile, is so opposed to the cash payments on federal taxes, that they’ve begun charging penalties to businesses that pay in greenbacks.

So to help fix the problem, the Colorado legislature has created a co-op that would act very similar to a bank. It would allow pot vendors to make deposits, withdrawals and even electronic transfers.

The problem is that in order to have the co-op function fully, it needs to get approval from – wait for it – the federal government.

Mike Elliot from the Marijuana Industry Group says the regulatory hurdle with the co-op has to do with the Automated Clearing House (ACH), the same system used to make direct deposits for employees.

As Elliot explains to Lizzie O’Leary, most people in Colorado’s marijuana industry think the chance of this co-op passing federal muster are about the same as finding one of those snow-cones in the Sahara Desert.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.