The centralized banking system has refused to bank with cannabis businesses, forcing the cannabis industry to come up with creative ways to work around it. Some have turned to bitcoin instead of using the dollar system. It seemed like the Fourth Corner Credit Union was going to be the first cannabis-friendly credit union after it was approved by banking regulators. Now the Federal Reserve has denied the credit union an account number, continuing the nationwide game of push and pull in the cannabis industry.
The Fourth Corner Credit Union in Denver thought they’d cracked the cannabis industry’s bank problem by opening up their own credit union. They had gotten farther this time by receiving a state charter to run a bank. The company applied for a master account in order to legally start up a credit union. The Federal Reserve denied the application- this time, because the NCUA would not insure Fourth Corner(or any other cannabis business.) The NCUA said giving Fourth Corner deposit insurance would constitute “undue risk” because cannabis remains illegal under federal law.
After the Federal Reserve denied the account number, Fourth Corner returned with a lawsuit. The lawsuit reads “The majority of (marijuana related businesses) are forced to operate in cash only, and to suffer the high cost of handling and safeguarding this cash. The public is at risk in having hundreds of millions of dollars of cash flowing about the streets of Colorado… The ‘seed-to-sale’ state and municipal regulation of cannabis works – until the point of sale when a sale generates cash.”
Kristi Kelly, owner of GoodMeds, told USA TODAY, “We consider ourselves regulated, legitimate businesses. We just want to have the same access to banking that other legitimate businesses have,” in November. “I don’t want to pay people in cash.” Insurance companies will never perceive cannabis companies as risk-free so long as the federal government continues to prohibit marijuana in all forms.