A marijuana plant grows at a Minnesota Medical Solutions greenhouse in Otsego, Minn. (Photo: Glen Stubbe/Star Tribune via AP)
A cannabis-centric credit union is going after the Federal Reserve after its application to open a “master account” was rejected.
Fourth Corner Credit Union (TFCCU) in Denver wants to be the first to provide financial services to the marijuana industry in Colorado, where recreational use of the drug is legal under state law.
The credit union, which was quietly notified of its rejection in July, filed a lawsuit in federal court against the central banking system for the setback, the New York Times reported Thursday. It accuses the Fed of preventing “equal access” to the financial system.
Mark Mason, an attorney from South Carolina, had a leading role in founding TFCCU, which cannot officially start business before securing an account.
Mason said he was not surprised by the decision and thinks the Fed had been looking for reasons to reject the credit union’s application.
“I felt all along like they were trying to figure out a way to deny our application,” Mason told the Times, adding that a “federal judge who is only concerned in applying the law can [now] make the decision.”
Mason confirmed the lawsuit in an email to The Denver Post later that night.
“TFCCU looks forward to having this matter ruled upon by a federal judge,” he wrote.
Most banks have refused to open accounts for cannabis proprietors because the substance is still banned under federal law as a Schedule I drug alongside far more dangerous substances, including heroin, LSD and ecstasy.
Bear Westerlind, an employee at the medical marijuana dispensary Kaya Shack in Portland, Ore., displays different types of marijuana flowers sold at the shop. (Photo: Gosia Wozniacka/AP)
This forces them to rely exclusively on cash, which renders businesses particularly vulnerable to theft.
Dan Riffle, the director of federal policies for the Marijuana Policy Project, told Yahoo News that legislation like the CARERS Act or the Respect State Marijuana Laws Act, which are pending in Congress right now, would resolve the disconnect between state and federal marijuana laws.
“Congress has to act. Forcing marijuana businesses — which are on pace to do almost $1 billion in sales in Colorado alone — to operate entirely in cash puts a bullseye on those businesses, their employees, their customers and everyone around them,” Riffle said. “State, federal and local law enforcement have rightly called it a public safety nightmare.”
The Respect State Marijuana Laws Act of 2013, sponsored by Rep. Dana Rohrabacher, R-Calif., would amend the Controlled Substances Act so that anyone acting in compliance with state law would not be punished.
Similarly, the CARERS Act of 2015 (also known as the Compassionate Access, Research Expansion and Respect States Act), sponsored by Sen. Cory Booker, D-N.J., would protect those acting in compliance with state law while moving cannabis from a Schedule I to a Schedule II substance.
Riffle criticized Sen. Chuck Grassley, R-Iowa, and Rep. Bob Goodlatte, R-Va., the chairmen of the Senate and House Judiciary Committees, for refusing to hold hearings on these bills.
“It’s almost as if they want these businesses to get robbed, and for violent drug cartels to continue to control the marijuana industry,” he said.
Neither the Federal Reserve Bank of Kansas City, which covers Colorado and several other states, nor Mason responded to Yahoo News’ request for comment.