A late bill to create co-ops to finance the marijuana industry has come back from a near-death experience.
House Bill 1398 got off to a strong start Thursday in the House Business Committee, only to get gutted late that evening in the House Finance Committee before House Appropriations restored the original version Friday morning and sent the measure to a vote on the House floor.
The bill puts a twist on the credit-union model by creating cannabis credit co-ops for licensed pot businesses and their affiliates who are currently blocked from the traditional banking system because of federal prohibitions on marijuana.
“This sets up a structure of a new type of financial structure to the gap we’re seeing between banking and the marijuana industry,” testified sponsor Rep. Jonathan Singer, D-Boulder. “It’s the only solution we see.”
zzzzzz: Learn more about House Bill 1398 that would create banking option for pot businesses
But the co-ops would still need Federal Reserve Bank approval to access the national banking system, which isn’t expected to be granted.
“We have no problem with them trying it,” Don Childears, CEO of the Colorado Bankers Association, testified Thursday. “But when it won’t work, the message to Congress is that we’re all done at the state level and they have to focus and deal with it.”
The fiscal note to the bill estimated implementing regulatory oversight over the co-cops would cost $278,466 in the first year and require the equivalent of 2.7 full-time employees.
The House Committee on Business, Labor, Economic & Workforce Development passed the measure 9-2 on Thursday afternoon, handing it off to the House Finance Committee which did a strike below that effectively stripped the bill down to a study.
The amended version required the Department of Regulatory Agencies to study the issue, including “improving Colorado’s ability to track and independently verify the accounting of licensed marijuana businesses’ revenues and avoiding incentives to use the black market for marijuana.”
House Appropriations, however, restored the original version.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
Denver Post reporter David Migoya contributed to this report.
