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Colorado — A Colorado financial institution is suing the federal government to be allowed to serve the state’s growing marijuana industry, according to a report in The New York Times.
The Federal Reserve earlier this month rejected the application from The Fourth Corner Credit Union in Denver, because it intends to provide banking services to state-licensed marijuana businesses.
The federal government still prohibits the use of marijuana, even though many states have taken steps to legalize recreational and medical marijuana.
In response, the Obama administration has loosened enforcement against many marijuana businesses that operate outside of federal law, but it has yet to lift a ban on banks dealing with these companies.
As a result, most banks do not open accounts for marijuana businesses, even if they are operating within states that allow it.
Critics say this is a public safety issue, because it places a target on the backs of marijuana businesses by forcing them to keep large amounts of cash in their stores.
The Fourth Corner Credit Union applied last November to become the first financial institution in Colorado to serve marijuana dealers, but the Federal Reserve rejected their application.
The credit union is now suing the government in federal court for “equal access” to the U.S. financial system, according to the report.
Source: Hill, The (US DC)