DENVER – The nation’s first proposed state-backed investment bank for the marijuana business failed Tuesday after a fiery debate in the Colorado House.
Democrats and Republicans fell on both sides of the argument over starting a fund to legitimize investment in marijuana research. The proposed Colorado Investment Trust was promoted as a way to allow pot shops to borrow money and bank.
“This will legitimize this business, bring them into the light of day,” said Republican Rep. Tom Massey, the idea’s sponsor.
But opponents sided with another Republican who argued that because marijuana is federally illegal, and FDIC-insured banks won’t accept marijuana money, Colorado would be wading into perilous legal territory if it tried to oversee marijuana-funded business.
“There’s no way to get around this. ... You can’t violate the federal law,” argued Republican Rep. Mark Barker, who argued against the trust fund. The fund would have been the nation’s first in which a state allowing medical marijuana also oversees business transactions rejected by federally chartered banks and investment firms.
House members rejected the fund on a voice vote, but they then went on to give preliminary approval to a raft of new regulations for Colorado’s booming marijuana business.
The new regulations relax residency requirements for people working in pot dispensaries, so that owners but not employees have to have been in Colorado for two years.
The bill extends by one year, to summer 2012, a moratorium on new dispensaries. It also sets up privacy requirements for how dispensaries handle patient records, and requires caregivers growing pot in their homes to register their operations with local authorities.
In addition, the bill sets a new 500-plant limit for makers of infused marijuana products, such as pot brownies. Dispensaries would be able to sell no more than six nonflowering plants to a patient within a three-month period.
The measure faces a more formal vote in the House before heading to the Senate.