Complicated Tenth Circuit ruling tries to sort out marijuana banking issues in shadow of federal prohibition

As reported in this Cannabist article, headlined “Federal appeals court gives Colorado marijuana credit union another chance,” the Tenth Circuit has issued an intricate and complicated ruling on banking issues in the marijuana space. Here are the basics from the article:

A federal appeals court has breathed life into a plan hatched in Colorado to open a credit union for the marijuana industry. A three-judge panel for the 10th U.S. Circuit Court of Appeals on Tuesday vacated a district court ruling that nixed Denver-based Fourth Corner Credit Union’s bid to receive a master account with the Federal Reserve Bank of Kansas City.

Fourth Corner Credit Union first formed in late 2014 with the goal of serving licensed marijuana-related businesses, which have had trouble accessing financial services from traditional banking institutions. Any credit union or bank needs a Federal Reserve master account to operate.

The judges remanded the case to the district court with instructions to dismiss the amended complaint without prejudice. “By remanding with instructions to dismiss the amended complaint without prejudice, our disposition effectuates the judgment of the two panel members who would allow the Fourth Corner Credit Union to proceed with its claims,” the judges wrote in the June 27 opinion.

Previously, the district court dismissed Fourth Corner’s case with prejudice, meaning that the credit union could not refile. The 10th Circuit panel decision allows for Fourth Corner to reapply to the Federal Reserve for a master account, and — if it were to be denied again — the credit union could take the case back to court, said Tom Downey, a Denver-based attorney who specializes in cannabis regulations and law with Ireland Stapleton Pryor & Pascoe P.C.

This paragraph from the start of the Tenth Circuit panel’s 60+ page opinion in Fourth Corner Credit Union v. Federal Reserve Bank of Kansas, No. 16-1016 (10th Cir. June 27, 2107) (available here), serves as a kind of a symbol of the mess that persists thanks to state and federal laws on marijuana being in tension:

In this appeal, we vacate the district court’s order and remand with instructions to dismiss the amended complaint without prejudice.  This disposition is addressed in three opinions — one by each member of the panel. Judge Moritz would affirm the dismissal with prejudice. Judge Matheson would vacate and remand with instructions to dismiss the amended complaint without prejudice on prudential-ripeness grounds.  Judge Bacharach would reverse the dismissal of the amended complaint.  By remanding with instructions to dismiss the amended complaint without prejudice, our disposition effectuates the judgment of the two panel members who would allow the Fourth Corner Credit Union to proceed with its claims.