Update: Bill to Create Banks for Colorado MMJ Dispensaries, Marijuana Businesses Goes Up in Smoke

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Colorado lawmakers have shot down a proposal to create “financial cooperatives” for medical cannabis companies, expressing numerous concerns with the idea and saying the state simply doesn’t have the authority to overstep the federal government on this particular marijuana issue.

The bill would have allowed MMJ dispensaries and medical marijuana companies to deposit money and make withdrawals at special banks catering solely to the cannabis industry.

Supporters of Senate Bill 75 saw the proposal as an ideal workaround to a pressing financial problem for medical marijuana companies. Only a handful of banks are willing to do business with the industry, meaning many cannabis dispensaries are set up as cash-only businesses. Some medical marijuana companies have been forced to employ questionable tactics – such as misleading the bank on the nature of the business – just to open an account.

As Medical Marijuana Business Daily reported yesterday, two Colorado lawmakers introduced the bill as a way to help out the MMJ industry. But their peers on the Senate Finance Committee were uneasy with the idea after several hours of debate, eventually killing the bill by a 5-2 vote.

Even those tied closely to the bill expressed doubt near the end of the hearing.

“I’m not sure this is a problem the state can solve,” said Democractic Sen. Pat Steadman, a co-sponsor of the bill, according to the Associated Press.

The bill was the only real hope at this point for the cannabis industry on the banking front, as little is being done locally or federally to address the issue. Colorado MMJ dispensaries and marijuana businesses will have to operate in this precarious landscape for the foreseeable future, as banks are simply unwilling to take on the risk of prosecution without assurances from the federal government.

The Medical Marijuana Business Alliance and the National Cannabis Industry Association are hosting a panel discussion about banking in the MMJ industry tonight in Denver and will address the defeat of Senate Bill 75.