A Denver-based credit union took on the Federal Reserve in court last week over the right to deal directly with the cannabis industry.
The Fourth Corner Credit Union of Denver has challenged a federal law forbidding financial institutions from doing business with the marijuana industry. Under federal law, such institutions found to be doing business with dispensaries that legally sell marijuana –which is still federally classified as a Schedule 1 controlled substance– face prosecution and closure.
“We are asking for a level playing field, but they own the team and they own the field,”
Mark Mason, a credit union attorney, said in court last Monday. “We are simply asking for the right to be born.”
Mason was referring specifically to the Federal Reserve Bank of Kansas City, the overseer of the Denver district which has denied the credit union the master account it needs to carry out business. The federal ban has thus forced many businesses in the industry to operate solely using cash, which has caused unease among many of the state’s proprietors.
The disparity between federal law and state law was not lost on Mason, who excoriated the Federal Reserve’s Kansas City branch for what he saw as flouting the voice of Coloradans.
“The sovereign state of Colorado determined that this was a qualified credit union and gave us a charter,”
“Who is the Federal Reserve Bank of Kansas City to second-guess Colorado? Does the Federal Reserve set national drug policy now?”
The judge in the case, U.S. District Judge R. Brooke Jackson, has no deadline for making a decision in the matter. However, other industry insiders see hope on the horizon.
“In 2016, $1.2 billion in cash will be transacted by the cannabis industry in Colorado,” said Mark Goldfogel, Fourth Corner’s executive vice president. “That’s all in $20 bills. At some point, someone is going to die. And then we will be allowed to bank.”