Medical marijuana industry's cry for banking services prompts unique Colorado legislation

DENVER (AP) — Medical marijuana is legal in 17 states, but the industry has a decidedly black–market aspect — it's mostly cash–only.

Banks won't touch pot money. The drug is illegal under federal law, and processing transactions or investments with pot money puts federally insured banks at risk of drug–racketeering charges.

In Colorado, state lawmakers are attempting an end–run around the federal ban with a bill that would create the nation's first state cooperative financial institution for dispensaries and growers to allow them to store and borrow money.

The proposal, if enacted, would be a direct challenge to the U.S. Justice Department, which warns that all financial transactions involving pot money are illegal.

But for Colorado's 600 or so medical marijuana dispensaries, and hundreds more growers and associated industry workers, the problem of not being able to bank marijuana money is big enough to make the challenge worthwhile.