DENVER The Colorado state Senate passed a bill on Wednesday to create the nation's first state-run marijuana financial cooperative, with the ultimate aim of opening newly legalized cannabis retail outlets to key banking services through the Federal Reserve.
The 24-11 vote approving the so-called "cannabis credit co-ops" came days after the state House of Representatives cleared its own version of the bill, which seeks to address problems marijuana retailers face in having to operate on a cash-only basis.
House-Senate negotiators must now reconcile differences between the two versions in hopes of sending a compromise bill back for final floor votes in both chambers before the Democratic-controlled General Assembly session ends at midnight.
If they meet the deadline, the legislation will then head to Governor John Hickenlooper, a Democrat, who is expected to sign the bill into law.
The proposal's chief sponsor, Representative Jonathan Singer, said the cooperatives are needed because traditional banks and credit unions have been hesitant to serve the burgeoning marijuana industry as long as the drug remains outlawed by the U.S. government.
"This is the final piece to our pot puzzle," said Singer, a Democrat.
Voters in Colorado and Washington state legalized the possession and use of small amounts of cannabis by adults for recreational purposes in 2012. Both states are among 20 states that allow the use of cannabis for medical reasons.
The first recreational cannabis shops opened in Colorado in January, and Washington is set to follow suit later this year.
Singer said the cash-only nature of the industry makes pot businesses targets of crime, limits owners' access to credit and capital and hinders the state's ability to track revenues for tax-collection purposes.
Under the bill, the financial cooperatives would operate similarly to credit unions - without a deposit insurance requirement - and would be governed by the state's financial services commissioner.
But to gain access to banking services such as credit card processing and checking accounts, the Federal Reserve would need to approve the plan, which critics say is unlikely in the absence of a deposit insurance mandate.
Republicans voted against the measure, saying such complex legislation needed further study and should not have been rushed through the legislature at the end of its session.
The Obama administration in February issued new law-enforcement guidelines aimed at encouraging banks to start doing business with state-licensed marijuana suppliers, even though such enterprises remain illegal under federal law.
The guidance stopped short of promising blanket immunity to banks, and financial industry officials have said they doubted many banks would begin to accept cannabis suppliers as customers without actual changes in federal law.
(Editing by Steve Gorman and Eric Walsh)