Pot industry hits another roadblock in Colorado, credit union sues banking regulators

The pot industry has hit a roadblock. Perhaps one of the most interesting and simultaneously frustrating topics for those within the pot industry has been the lack of banking options offered throughout the U.S. Even as pot was legalized for recreational purposes in states like Colorado, banking options are few and far between, causing serious concern amongst business owners who are moving as much as $500,000 per month.

However, a closer look at the problem reveals that an outdated federal banking regulation is the culprit. In order for a bank to gain entrance into the federal system that allows them to be insured and protected like other banking institutions, they must gain approval from a federal body. That body is the Federal Reserve, and the Fourth Corner Federal Credit Union was seeking a master account, which would make them a legitimate bank.


The Fourth Corner Federal Credit Union was created because those who were operating legitimate, tax paying businesses were having difficulty keeping, or opening a checking account, obtaining a mortgage, or even gaining a line of credit. The problem, according to the Federal Reserve, is that while states have individually approved recreational marijuana sales – it is still against federal regulation to actually trade money within a banking system that comes from drug sales.

This is where the federal government has been asked to act on making marijuana legal across the U.S. in an effort to cut through the red tape that has been created. Banks that have denied individuals and businesses accounts, and for the few who have managed to keep their accounts unclosed – officials say that they were grandfathered in through medicinal marijuana regulation. It has been argued that for those who already had accounts before the recreational marijuana regulation kicked in, were a part of the medicinal marijuana regulation.


To make matters worse for those businesses they are left using unconventional methods for working through the system. They cannot write a check to pay a bill, or pay a vender. Even simple tasks like this have to be executed using strictly cash, and as officials have pointed out – the smallest of transactions are considered “money laundering” under federal guidelines. The reality is that now businesses are being forced to use unofficial means for storing money, transporting large quantities of cash by means that are anything but secure, and leaving individuals open to be robbed at any turn.

This is a problem that has to be addressed. At this point, proponents of the federal change, which would be required to truly reform the situation say that it is up to lawmakers and federal judges to act. In the case of Fourth Corner Federal Credit Union, it is hypocritical business like this that destroys legitimate business, and in this case, it is a business that is growing at a monstrous rate.


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  • Yeah, see here’s the thing. Pot’s still a federally restricted drug. Since you are looking for federal approval, the short answer is ‘that’s not gonna happen’.

    They can just do like banks used to do, and keep the money in a big vault.

    • Yes but the hypocrisy stinks worse than the dankest weed. The feds are perfectly happy to take the tax money from pot sales, and at the same time say it’s not legal business.

      • Pay them in gold bullion or silver! Maybe in individual dollars and say well we would electronically transfer the payment but we can’t. Then see if the fed is ok with them Not being able to pay their taxes electronically. Would be hilarious for convoy of armored cares to show up to pay taxes!

        • I say they should pay their taxes with aluminum cans. The going price for aluminum cans is ~$0.35/LB.

  • The profound stupidity of continued cannabis prohibition just amazes me. Most people, and certainly most rational people without a “social engineering” agenda, want it to be legal. There’s simply no evidence that cannabis is even remotely as destructive as alcohol that kills millions of people in this country a year. Of course hoping for logic or reason from the federal government is probably delusional. It often seems they are just incapable of it.

  • “It is against federal regulation to actually trade money within a banking system that comes from drug sales.”………. To those people in whose (financial) interests it is to perpetuate the Prohibition of Cannabis the semantically incorrect use of the word “drug” where cannabis is concerned, is a premeditated misuse of terminology. This serves strategy advantageous to Prohibitionists, and comprises a simple but effective mechanism of disinformation, by putting the harmless herb into an unjustifiable association with addictive and harmful drugs.

  • “Even as pot was legalized for recreational purposes in states like Colorado”

    …AND WASHINGTON. Recreational marijuana was approved by voters THE SAME DAY in both Colorado and Washington and has since been approved in Alaska and Oregon. Why do so many articles leave Washington out?

  • Federal Reserve is a private business. This is just beyond stupid.

  • Hmm, I wonder where pharmaceutical companies put their DRUG money?

  • Well banks refuse to do business with firearms companies who sell items that are 100% legal in all 50 states and I don’t see anyone suing banks because of that?

  • The interesting twist to this story that the mass media is not covering is that Doug Friednash is the Registered Agent for Fourth Corner Credit Union.

    Doug Friednash is also a former Denver City Attorney, a shareholder in the law firm Brownstein Hyatt Farber Schreck LLP, and was named as Chief of Staff for Colorado Gov. John Hickenlooper in January of this year.