In a significant setback (but not really a surprise), for the cannabis industry, the Denver Post reports that newly formed Fourth Corner Credit Union in Colorado cannot force the Federal Reserve Bank to give it approval to operate under Federal law. The Fed initially denied Fourth Corner’s application, so Fourth Corner sued. The Fed moved to dismiss the case, and that’s what US District Judge R. Brooke Jackson did yesterday.
In 2014, the Federal government issued guidelines making it clear that prosecutors should de-prioritize going after banks taking cannabis money, as long as certain precautions were taken. Fourth Corner argued that this showed the Feds were backing off and they should have federal approval to operate. The Judge disagreed, saying that the law is the law, cannabis activity is still a federal crime, and prosecutorial discretion is another matter. He also suggested this situation is “untenable” and should be addressed by Congress. Your humble blogger agrees.
Did Alexander Hamilton, now of Broadway fame, imagine this when he chartered the first national banking system in 1791 that later morphed into the Federal Reserve System in 1913? As an attorney, I grudgingly understand the position in which Judge Jackson found himself. There must be a bipartisan solution, even with a divided government, to allow these state lawful businesses to function and thrive.
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