Speed Reads

Pot politics

Cannabis credit co-ops: Colorado approves weed-only banking system

Chris Hondros/Getty Images

You ever think about the banking system — on weed? Perhaps you haven't, but Colorado lawmakers certainly have, as they on Wednesday approved a plan that would establish the world's first marijuana-specific banking system.

Though marijuana is legal in Colorado, it remains very much illegal at the national level. That presented financial institutions there with a dilemma: They couldn't handle THC-tainted money without technically breaking federal law. And even though the Treasury Department gave them some leeway, most banks opted to stay away just in case, meaning the entire fledgling pot industry, from growth to distribution to sales, was more or less de facto cash-only.

Colorado's plan would circumvent that problem by allowing marijuana businesses to form uninsured banking co-ops. These "cannabis credit co-ops," as they've been dubbed, would allow pot businesses to create checking accounts, take out loans, and so forth. The one catch: The system won't go into effect unless the Federal Reserve signs off on it.