Colorado lawmakers OK co-op banking option for marijuana sellers

By Keith Coffman

DENVER (Reuters) - The Colorado legislature on Wednesday voted to create the nation's first state-run financial cooperative for marijuana sellers, with the aim of giving newly legalized cannabis retail outlets access to key banking services through the U.S. Federal Reserve.

The approval of the so-called "cannabis credit co-ops" came on the final day of the legislative session, as lawmakers seek to address problems marijuana retailers face in having to operate on a cash-only basis, such as burglary threats.

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.

The final approval on Wednesday came after both chambers of the General Assembly cleared their own versions of the bill. The bill now heads to Democratic Governor John Hickenlooper for his signature.

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 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 who voted against the measure said 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 changes in federal law.

Another bill headed to the governor's desk allocates tax revenues derived from retail pot sales to marijuana enforcement, and to fund education programs designed to prevent youths from using the drug.

Also on Wednesday, Colorado legislators approved a requirement that cannabis-infused edibles be readily identifiable as containing THC, the psychoactive property in marijuana.

A bill to limit the amount of concentrates inside cannabis products also won passage this week, an issue that gained attention following two deaths possibly linked to the ingestion of marijuana products.

(Editing by Steve Gorman, Eric Walsh, Eric M. Johnson and Michael Urquhart)

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Colorado Senate OKs co-op banking option for marijuana sellers

By Keith Coffman

DENVER (Reuters) - 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)

Legislative BranchPolitics & GovernmentColorado state SenateFederal Reserve

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Ex-Microsoft manager plans to create first U.S. marijuana brand

By Jonathan Kaminsky

SEATTLE (Reuters) - A former Microsoft executive plans to create the first U.S. national marijuana brand, with cannabis he hopes to eventually import legally from Mexico, and said he was kicking off his business by acquiring medical pot dispensaries in three U.S. states.

Jamen Shively, a former Microsoft corporate strategy manager, said he envisions his Seattle-based enterprise becoming the leader in both recreational and medical cannabis - much like Starbucks is the dominant name in coffee, he said.

Shively, 45, whose six years at Microsoft ended in 2009, said he was soliciting investors for $10 million in start-up money.

The use, sale and possession of marijuana remains illegal in the United States under federal law. Two U.S. states have, however, legalized recreational marijuana use and are among 18 states that allow it for medical use.

"It's a giant market in search of a brand," Shively said of the marijuana industry. "We would be happy if we get 40 percent of it worldwide."

A 2005 United Nations report estimated the global marijuana trade to be valued at $142 billion. http://www.unodc.org/pdf/WDR_2005/volume_1_web.pdf

Washington state and Colorado became the first two U.S. states to legalize recreational marijuana when voters approved legalization in November.

Shively laid out his plans, along with his vision for a future in which marijuana will be imported from Mexico, at a Thursday news conference in downtown Seattle.

Joining him was former Mexican President Vicente Fox, a longtime Shively acquaintance who has been an advocate of decriminalizing marijuana. Fox said he was there to show his support for Shively's company but has no financial stake in it.

"What a difference it makes to have Jamen here sitting at my side instead of Chapo Guzman," said Fox, referring to the fact he would rather see Shively selling marijuana legally than the Mexican drug kingpin selling it illegally. "This is the story that has begun to be written here."

Shively told Reuters he hoped Fox would serve an advisory role in his enterprise, dubbed Diego Pellicer after Shively's hemp-producing great grandfather.

The sale of cannabis or marijuana remains illegal in much of the world although countries mainly in Europe and the Americas have decriminalized the possession of small quantities of it. A larger number of countries have decriminalized or legalized cannabis for medical use.

SKEPTICISM

Shively acknowledges that his business plans conflict with U.S. federal law and are complicated by regulations in both Washington state and Colorado. He said he is interested in buying dispensaries that comply with local and state rules and are less likely to attract the scrutiny of authorities.

"If they want to come talk to me, I'll be delighted to meet with them," he said of federal officials. "I'll tell them everything that we're doing and show them all our books."

Washington state's marijuana consultant, Mark Kleiman, said he was skeptical of Shively's plans, and feared that the businessman is seeking to profit off others' addiction.

"It's very hard for me to understand why anybody seriously interested in being in the marijuana business, which after all is against the federal law, would so publicly announce his conspiracy to break that law," said Kleiman, a professor of public policy at the University of California, Los Angeles.

Emily Langlie, spokeswoman for the U.S. Attorney's Office in Seattle, referred questions to the Department of Justice headquarters. Department officials did not immediately return calls seeking comment.

Washington state Representative Reuven Carlyle, a Seattle Democrat, sees promise in Shively's initiative. Any industry emerging from the shadows will inevitably undergo consolidation - and thereby simplify the task of regulators, he said.

"The fact that an entrepreneur is publicly pushing the envelope around a branding and value-based pricing opportunity, I would say that's in the water in Seattle," said Carlyle, chairman of the House Finance Committee. "That's in our DNA ... We could have predicted that as much as the rain."

Shively said he has already acquired the rights to the Northwest Patient Resource Center, a medical marijuana operation that includes two Seattle store fronts. He added that he was close to acquiring another dispensary in Colorado, as well as two more each in Washington state and California, with the owners given the option to retain a stake in their businesses.

"We've created the first risk-mitigated vehicles for investing directly in this business opportunity," he said.

Shively said he ultimately plans to create separate medical and recreational-use marijuana brands. Shively said he also plans to launch a study of the effectiveness of concentrated cannabis oil in the treatment of cancer and other illnesses.

(Editing by Cynthia Johnston and Andrew Hay)

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Marijuana waste helps turn pot-eating pigs into tasty pork roast

By Jonathan Kaminsky

OLYMPIA, Washington (Reuters) - With Washington state about to embark on a first-of-its-kind legal market for recreational marijuana, the budding ranks of new cannabis growers face a quandary over what to do with the excess stems, roots and leaves from their plants.

Susannah Gross, who owns a five-acre farm north of Seattle, is part of a group experimenting with a solution that seems to make the most of marijuana's appetite-enhancing properties - turning weed waste into pig food.

Four pigs whose feed was supplemented with potent plant leavings during the last four months of their lives ended up 20 to 30 pounds heavier than the half-dozen other pigs from the same litter when they were all sent to slaughter in March.

"They were eating more, as you can imagine," Gross said.

Giving farm animals the munchies is the latest outcome of a ballot measure passed by Washington voters in November making their state one of the first to legalize the recreational use of pot. The other was Colorado. Both were among about 20 states with medical marijuana laws already on their books.

The federal government still classifies cannabis as an illegal narcotic, and the Obama administration has not yet said what actions, if any, it will take in answer to the newly passed recreational weed statutes.

Matt McAlman, the medical marijuana grower who provided the pot leavings for Gross' pigs, says he hopes the idea expands with the likely impending expansion of Washington state's marijuana industry.

"We can have pot chickens, pot pigs, grass-fed beef," he said.

Draft regulations issued last week to govern the burgeoning recreational-use industry seem to leave open that possibility. The rules dictate that marijuana plant waste must be "rendered unusable prior to leaving a licensed producer or processor's facility," adding that mixing it with food waste would be acceptable.

Gross' pigs were butchered by William von Schneidau, who has a shop at the famous Pike Place Market in downtown Seattle. In March, von Schneidau held a "Pot Pig Gig" at the market, serving up the marijuana-fed pork as part of a five-course meal.

He quickly sold out the remaining weed-fed meat at his shop but plans another pot-pig feast later this summer, he said.

"Some say the meat seems to taste more savory," he said.

The results beg the question of whether pot-fed pork contains any measurable traces of THC, the mind-altering chemical ingredient in cannabis.

The European Food Safety Authority reported in 2011 that "no studies concerning tolerance or effects of graded levels of THC in food-producing animals have been found in literature."

The agency also noted that "no data are available concerning the likely transfer of THC ... to animal tissues and eggs following repeated administration."

(Editing by Steve Gorman and Bob Burgdorfer)

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Seated woman sues FedEx over marijuana delivery

PLYMOUTH, Massachusetts (AP) — A Massachusetts Woman has sued FedEx, claiming the company wrongly sent a package containing seven kilos of marijuana, then gave his address to recipients, who later showed up at his door.

Maryangela Tobin of Plymouth said of the suit filed on 12 February to reveal its address, the company violated privacy laws of the State and endanger herself and her children.

"I feel like the security of my daughters and I myself was invaded and makes things complicated," said WBZ-TV. "Walk in my house before every time, not my kids."

Tobin said he thought that the package was a birthday party for her daughter, because when she opened, she found pixie sticks, candles and peppermint. There was also something he thought was Potpourri but it was marijuana.

Tobin said that about an hour later, a man knocked on his door looking for packages, and two men sitting in a vehicle in his driveway, waiting. Said that she did not have and bolted and slammed the door. Tobin argues that FedEx has given out its address, which led men to his house.

Police have made an arrest, but Tobin said now she is worried about retribution.

FedEx based on Memphis, Tennessee, said it does not comment on pending lawsuits.

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